Why LPs Keep Backing Mega-Funds Despite Lower Returns
PitchBook's Andrew Akers explains how LP career risk and private equity volatility laundering drive capital into underperforming mega-funds.
Diminishing Returns to Scale in Private Equity (w/ Andrew Akers, PitchBook)
With Devin Mathews, Andrew Akers · Sunday, September 27, 2026
PitchBook's Andrew Akers joins Devin Mathews to discuss the quantitative research behind 'Diminishing Returns to Scale' in private equity buyout funds. They explore how structural capital consolidation, career risk, volatility laundering, and excessive leverage drive mega-fund growth despite degrading returns relative to the middle market.
Key takeaways
- Institutional allocators routinely favor marquee buyout brands over higher-returning middle market funds to shield themselves from career risk. Read more →
- In a study of nearly 10,000 private equity transactions, zero buyout deals returning 10x cash-on-cash came from funds larger than $1 billion. Read more →
- PitchBook forecasts global private equity assets under management to reach nearly $9 trillion by 2030. Read more →
- PitchBook quantitative modeling shows that buyout outperformance is explained by sector selection, multiple expansion, and debt loads rather than operational value creation. Read more →
- PitchBook data shows that marquee mega-buyout managers have degraded in performance relative to the fund universe, with recent vintages slipping below the neutral score of 50. Read more →
- PitchBook quantitative analyst Andrew Akers argues that private equity indexing is a structural misnomer because buyout returns depend on active operational intervention by dealmakers, not passive exposure. Read more →
6 articles from this episode
Why Mega Buyout Funds Cannot Produce 10x Returns
PitchBook data shows zero 10x buyout deals from $1B+ funds. Here is why mega-funds underperform while large pensions remain trapped.
Why Mega-Funds Capture 60% of Private Equity Capital
PitchBook data shows the top 5% of buyout funds take 60% of all PE capital. Andrew Akers explains the structural mechanics driving mega-fund growth.
Private Equity Alpha Is Just Debt and Tech Beta
PitchBook quantitative research reveals buyout outperformance comes from tech sector selection and debt, not operational improvements.
Why Mega-Buyout Returns Degraded Below Median
PitchBook data shows mega-buyout fund performance has slipped below neutral, behaving more like levered growth than operational value creation.
Why Indexing Private Equity Fails LPs
Andrew Akers shows why private equity index wrappers stack extra fees without delivering public market outperformance.
More Private Equity Funcast episodes
- Building Your 2027 AI Budget (w/ Justin D’Onofrio, Accordion)Sep 20 · 5 articles
- Understanding Management Equity: What PE CEOs Should KnowSep 13 · 6 articles
- Parker Gals: Angela McCoy, May RiverSep 6 · 1 articles
- What's Wrong in Private Equity (w/ Lee McCabe)Sep 6 · 5 articles