Strategic Uniqueness

The MJ Hudson PERACS Strategy Evaluation Metric analyses a GP’s portfolio to demonstrate relative to the PE universe:

  • the uniqueness of their strategy
  • how pro-cyclical or counter-cyclical it is
  • how consistent their strategy is by country, by size, and by industry

This metric is the refined outcome that determines the “Fitness Score” of the HEC-DowJones PE Fitness Ranking. It offers the possibility to compare the strategic investment approach of a given firm with its closest competitors.

Fund to be benchmarked: Large Cap European Fund

List of relevant competitors (by order of strategic overlap):

  • BC European Capital VII (VY 2000)
  • Third Cinven Fund, The (VY 2020)
  • Blackstone Capital Partners IV, L.P (VY 2003)
  • CVC European Equity Partners III LP (VY 2011)
  • KKR European Fund (VY 1999)
  • Hellman & Friedman Capital Partners IV, L.P. (VY 2000)
  • Character Capital Partners VI (VY 1997)
  • Carlyle Europe Partners, L.P. (VY 2003)

Example GP - Aggregate


Key Insights into two distinct GP skills:

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

Value Creation

  • A refined quantification that is independent and standardised
  • Used to evaluate how the manager Alpha deal-by-deal and in the aggregate as the basis for assessment of investment strategies
  • Separates value drivers into operational improvements and financial effects
Value Driver Bridge

Quantification of strategic investment approach

  • Refinement of the criteria that determine the 'Fitness Score' of the HEC-DowJones PE Fitness Ranking
  • Possibility to compare the strategic investment approach of a given firm with its closest competitors
  • Quantifies indicators of investment strategy and based on three criteria: