2024 Search Fund Study (cover subtitle "Research Overview"; listed on the GHCES hub as "2024 Search Fund Study: Selected Observations")
Peter Kelly, Sara Heston. (2024)
Stanford GSB Case E-870, 27 pp
Dated June 28, 2024; data as of December 31, 2023. Sample: "681 first-time search funds formed since 1984" (p4), now called "core search funds"; data on 328 acquirers, "296 are included in our aggregate financial analysis, excluding 29 companies that had been operating for less than one year and three companies for which we had incomplete financial information" (p4). Headline: "For all search funds, IRR was 35.1% and ROI was 4.5x as of December 31, 2023" (p7); "the IRR for companies that have exited increased to 42.9% from 36.8%" (p2); "Of those that concluded their search, 63% made acquisitions, a decrease from 66% in the 2022 study" (p4); "The median purchase price ... declined to $14.4 million in this study from $16.5 million in the prior report, representing a 7.0 multiple of EBITDA" (p2). Exclusions: serial, self-funded, single-investor searches, plus 22 Long Term Hold vehicles (seven of which had been in prior editions) (p4); p16 states "self-funded searches are the most numerous" of the alternative models and that Stanford "has not collected sufficient data" to report on them.