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LP Scorecard: Top and Bottom Five UTIMCO First Time Funds

The top performer of UTIMCO’s first time managers is a European offering, the 2002 vintage Equistone Partners Europe Fund A LP, managed by the former executives of Barclays Private Equity, which posted an IRR of 34.76 percent and multiple of 2.42x. Bottom of this week’s list comes the 2007 vintage Asian fund-of-funds outfit Emerald Hill Capital Partners I LP which posts an IRR of 2.4 percent and multiple of 1.08x for the period.

The median IRR and multiple of UTIMCO’s commitment to first time managers is 16.09 percent and 1.6x; top quartile is 22.98 percent and 2.4x and lower quartile is 5.79 percent and 1.1x. This compares favorably with the entire portfolio’s median IRR and multiple of 5.26 percent and 1.2x; top quartile IRR and multiple of 13.74 percent and 1.5x and lower quartile IRR and multiple of -0.04 percent and 1x.

According to research from alternative-asset data provider Preqin, private equity fundraising for first-time fund managers is at its lowest point since the financial crisis. First-time funds that closed in the first quarter of 2013 secured just $4 billion in aggregate capital, compared to the peak of $32 billion in the second quarter of 2008, according to Preqin. Twenty-eight first-time funds reached a final close in the first quarter of 2013, the lowest number in any quarter in the period 2008-2013.

Preqin’s data reveals that 129 private equity funds held a final close in the first quarter, having raised an aggregate $67 billion. First-time fund managers raised only 6 percent of the total capital raised by funds that closed in the quarter, compared to a peak of 20 percent in the fourth quarter of 2010. However, investors remain optimistic towards emerging managers; 46 percent of investors interviewed in December indicated that they will invest, or will consider investing, in first-time funds in 2013, according to Preqin.

Within its active portfolio, UTIMCO is committed to a range of high-profile global and domestic buyout and venture capital fund managers, including CVC Capital PartnersDoughty HansonEnCap InvestmentsFortress Investment Group, Hellman & Friedman Capital Partners and TPG Capital on the buyout side and Austin VenturesFoundry Venture CapitalUnion Square VenturesSofinnova Venture Partners and Spark Capital on the venture side. Of its total portfolio, the 1994 vintage Austin Ventures IV LP comes out top in performance, posting a 73.14 IRR and 8.4x multiple. The 2012 vintage EnCap Energy Infrastructure Fund LP is the top performing buyout fund for the period, posting a 61.6 percent IRR and 1.95x multiple.

Angela Sormani is a special correspondent for Buyouts in London.

See below to find out more about UTIMCO’s top and bottom performing first time funds.

 

Top Five

5. CVC European Equity Partners LP

Vintage: 1996

Multiple: 2.58x

IRR: 22.98 percent

 

4. ArcLight Energy Partners Fund I LP

Vintage: 2003

Multiple: 1.81x

IRR: 24.38 percent

 

3. Wingate Partners LP

Vintage: 1987

Multiple: 6.08x

IRR: 30.34 percent

 

2. SCF Partners LP

Vintage: 1989

Multiple: 3.12x

IRR: 33.71 percent

 

1. Equistone Partners Europe Fund A LP

Vintage: 2002

Multiple: 2.42x

IRR: 34.76 percent

 

Bottom Five (not including 2012/2013 vintages)

 

5. MatlinPatterson Global Opportunities Partners LP

Vintage: 2001

Multiple: 1.74x

IRR: 15.97 percent

 

4. American Industrial Partners Capital Fund LP

Vintage: 2005

Multiple: 1.65x

IRR: 12.35 percent

 

3. Escalate Capital I LP

Vintage: 2005

Multiple: 1.32x

IRR: 6.01 percent

 

2. Inverness/Phoenix Partners LP

Vintage: 1998

Multiple: 1.24x

IRR: 5.79 percent

 

1. Emerald Hill Capital Partners I LP

Vintage: 2007

Multiple: 1.08x

IRR: 2.4 percent