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
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:
