Launched today, the HEC Paris - DowJones Small-Cap Buyout Performance Ranking analyses the firms which generated the best performance for investors participating in the small-cap market segment. The companies which topped this first edition of the ranking are CAI Capital Partners, Falfurrias Capital Partners and Renovus Capital Partners.

The new HEC Paris – DowJones Small-Cap Buyout Performance Ranking is a follow – up study to the already established and informative HEC - DowJones Private Equity Performance Ranking which lists the world’s Top Private Equity (PE) firms in terms of aggregate performance.

In this new ranking, HEC Paris Professor Oliver Gottschalg, the study’s main author, wanted to address the lack of attention given to companies and investors targeting small-cap firm, businesses whose total market value, or market capitalization, is about $30 million to $300 million.

According to Gottschalg, this market segment is especially interesting because “top Small-Cap buyout firms are much more diverse in terms geographic origin than large buyout and mid-market firms, where US firms were much more dominant at the top of the rankings.”

The ranking lists Private Equity firms who cumulatively raised between 100M and 1B USD over a decade in terms of aggregate performance based on all their buyout funds raised between 2008 and 2017. In total, HEC Paris Professor Oliver Gottschlalg analyzed performance data from 517 PE firms and 991 funds with an aggregate equity volume of $1.5tr.

The three companies which topped this first edition of the ranking - CAI Capital Partners, Falfurrias Capital Partners and Renovus Capital Partners - together with GMT Communications Partners (4) are firms which have been around for a very long time and have not grown or chosen not to grow over the years. Similarly, the top was reached by an industry specialist (CAI on Business Services), followed by a diversified GP (Falfurrias).

“This just shows that sector focus or diversity are neither a necessary nor a sufficient condition for success,” explains Prof. Gottschalg.

To obtain a most accurate picture of PE and their investments, the author drew from a variety of available databases and performed a number of cross-checks of the information using preqin PE fund performance database as the primary database for fund performance information, and information directly provided by PE Firms to HEC Paris for the purpose of these rankings.

Top 20 companies of the Small-Cap Buyout Ranking

Sponsored by advisory firm PERACS GmbH (now part of MJHudson), Prof. Oliver Gottschalg has developed a proprietary methodology that makes it possible to comprehensively assess the aggregate performance of all funds managed by a Private Equity Firm. The basis for this assessment is the performance of each fund, measured in terms of three complementary performance measures: IRR, DPI (cash-only return multiple) and TVPI (a return multiple that considers accounting values of ongoing investments). Prof. Gottschalg assesses performance in each measure both as absolute values and measured against the corresponding performance benchmark, leading to 2*3=6 performance indicators.

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