FUND PERFORMANCE ANALYTICS

Relevant Peer Benchmarking

Existing vintage year benchmarks are of limited accuracy as the traditional criterion group funds with very different investment focus and do not account for market dynamic where funds with similar focus from consecutive vintages compete for similar deals and LP commitments.

The MJ Hudson PERACS Relevant Peer Benchmark is an innovative Private Equity performance metric based on empirically-derived funds that directly compete with a given GP for investment opportunities in order to objectively capture funds active in the same space.

MJ Hudson generates a competitor peer set by analyzing the underlying portfolio of a GP and comparing those deals with similar deals done in the PE space as defined by size, geography, sector, and investment time period to determine which funds were really competing for similar deals to that GP.

  • An objective data-driven algorithm that identifies Relevant Peer Funds
  • Based on the similarity of a fund’s actual investments across time, geography, size, and industry
  • An independent set of peers is customized for each fund
  • Addresses the limitations of vintage year peer methods that group funds with different investment focus and timing

A comparison of performance (fund-by-fund) to the aggregate performance of the “relevant peers”  provides key insights into two distinct GP skills:

  • High Relevant Peer Benchmark = Superior Target Choice
  • Fund beats Relevant Peer Benchmark= Superior Execution / Implementation
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