Compendium of 46 Most Useful KPIs for the Private Equity Sector
These KPIs are crucial for assessing the performance, efficiency, and success of private equity investments and fund management.
1. Add-on Acquisitions per Portfolio Company: The average number of additional acquisitions made for each portfolio company.
2. Capital Calls Timing and Frequency: The timing and frequency with which capital calls are made to investors.
3. Capital Deployed: The total amount of capital invested or deployed in portfolio companies.
4. Capital Under Management: The total amount of capital that a private equity firm has available for investment.
5. Carried Interest: The share of profits that the fund manager (general partner) receives as compensation, typically calculated as a percentage of profits after a specified rate of return.
6. Cash on Cash Return: The ratio of cash distributions received to the total cash invested in a portfolio.
7. Co-investment Percentage: The percentage of a deal or investment that is funded by co-investors alongside the private equity fund.
8. Company Culture Score: A qualitative or quantitative measure assessing the cultural health and alignment within portfolio companies.
9. Cost per Deal Sourced: The average cost incurred to identify and source potential investment opportunities.
10. Cross-Fund Investments: The extent to which a private equity firm invests across multiple funds.
11. Deal Abandonment Rate: The percentage of deals that are initiated but not completed.
12. Deal Closing Ratio: The percentage of deals initiated that are successfully closed.
13. Deal Execution Speed: The time taken to complete the entire process from deal initiation to closure.
14. Deal Origination: The process of identifying and sourcing potential investment opportunities.
15. Deal Sourcing Efficiency: The effectiveness and efficiency of the deal origination process.
16. Dry Powder: The amount of uncommitted capital available for future investments.
17. Employee Growth at Portfolio Companies: The percentage increase in the number of employees across portfolio companies.
18. ESG Criteria Compliance: The degree to which portfolio companies adhere to Environmental, Social, and Governance (ESG) criteria.
19. Exit Ratio: The ratio of successful exits to the total number of investments.
20. Follow-on Investment Capacity: The ability and capacity to make additional investments in existing portfolio companies.
21. Founder Retention Post-Acquisition: The percentage of founders or key management retained after an acquisition.
22. Fundraising Efficiency: The efficiency with which a private equity firm raises capital.
23. GP Commitment: The amount of capital that the general partners commit to investing in the fund.
24. Hold Period: The average duration for which investments are held before being divested.
25. Hurdle Rate: The minimum rate of return that must be achieved before the fund manager can participate in the profits.
26. Internal Rate of Return (IRR): The annualized rate of return on an investment, considering the time value of money.
27. Investment Horizon: The planned duration for holding an investment before divesting.
28. Investment Multiples: The ratio of exit value to invested capital, providing a measure of returns.
29. J-Curve: A graphical representation of the expected negative cash flow followed by positive returns over the life of a fund.
30. LP Commitment Fulfillment: The extent to which limited partners fulfill their committed capital contributions.
31. Management Fees as Percentage of Committed Capital: The percentage of committed capital paid as management fees.
32. Multiple of Invested Capital (MOIC): The ratio of exit value to total invested capital.
33. Net IRR: The internal rate of return net of fees and expenses.
34. Operating Margin Improvement: The percentage improvement in operating margins of portfolio companies.
35. Ownership Percentage in Portfolio Companies: The percentage of equity ownership a private equity firm holds in its portfolio companies.
36. Percentage of Bolt-On Acquisitions: The percentage of acquisitions that are complementary or "bolt-on" to existing portfolio companies.
37. Portfolio Company Customer Satisfaction: A measure of customer satisfaction within portfolio companies.
38. Portfolio Diversification: The extent to which a private equity portfolio is diversified across different industries or sectors.
39. Reserve Ratio: The ratio of funds set aside for potential follow-on investments to the total fund size.
40. Revenue Growth at Portfolio Companies: The percentage increase in revenue across portfolio companies.
41. Secondary Market Transactions: The frequency and value of transactions involving the buying and selling of existing private equity fund interests.
42. Syndication Rate: The percentage of co-investors or other funds participating in a deal alongside the primary private equity fund.
43. Third-party Capital Co-invested: The amount of capital co-invested by third-party investors in addition to the private equity fund's investment.
44. Turnaround Success Rate: The percentage of investments in distressed companies that achieve successful turnarounds.
45. Underlying Asset Performance: The overall performance of the underlying assets within the private equity portfolio.
46. Vintage Year: The year in which a private equity fund is launched.
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