International Search Funds - 2018: Selected Observations
Lenka Kolarova, Peter Kelly, Antonio Dávila, Rob Johnson. (2018)
IESE ST-483-E, 32 pp
Dated September 2018; data as of December 31, 2017. The IESE hub and the Stanford hub both link a dead URL (awaytolearn.iese.edu/wp-content/uploads/2018/09/2018-Intl-Search-Fund-Study.pdf); the media.iese.edu URL above works. Sample: "83 first-time search funds ... in 22 countries on four continents" (p1), "excluding self-funded searches, second-time search funds and single-sponsor searches" (p3). Status: 40 searching; "Of the 43 others, 30 had acquired a company, five had ended their search without an acquisition and eight had deviated from the search fund model" (p4). Returns: "Of the 35 funds eligible ... 28 were included" (five unsuccessful searches, 23 acquisitions) (p10); "international search funds have achieved an ROI of 2.3x and an IRR of 33.3%. The median fund returned 2.0x ... The overall asset class ROI declined from 2.8x in 2016 to 2.3x in 2018" (p11); median acquisition "purchase price of $9.3 million ... a purchase price to EBITDA multiple of 4.9x" (p9).