Diminishing Returns to Scale in Private Equity (w/ Andrew Akers, PitchBook)
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.
- Institutional allocators routinely favor marquee buyout brands over higher-returning middle market funds to shield themselves from career risk. Read →
- 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 →
- PitchBook forecasts global private equity assets under management to reach nearly $9 trillion by 2030. Read →
- PitchBook quantitative modeling shows that buyout outperformance is explained by sector selection, multiple expansion, and debt loads rather than operational value creation. Read →
- 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 →
- 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 →