Private Capital Findings, Issue 21 | Coller Capital

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29 May 2025 Publication
Research & Insights

Private Capital Findings, Issue 21

Roundtable: Patterns of performance
Yet even in realised returns, there seem to be patterns to watch out for. Gregory, your research looks at deal-level MOICs and finds that a disproportionate number of deals achieve a multiple of 1.0x. The findings suggest that GPs are actively managing loss ratios, particularly during fundraising. But what are managers actually doing?

“We can see in the data that managers tend to hold on to assets for longer if the deal is under water, presumably in the hope that rising tides lift all boats. The trouble is that loss ratios are particularly subject to gaming because in a buyout fund, you may be talking about only one or two deals.

“Furthermore, the motivations for gaming are clear. The data shows that funds identified as being more likely to have manipulated their loss ratios raise larger funds and do so more quickly.”
Gregory Brown

 

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The impact of prolonged illiquidity
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The importance of LP loss ratios