2016 Search Fund Study: Selected Observations

Since 1996, the Center for Entrepreneurial Studies (CES) at the Stanford Graduate School of Business (GSB) has conducted a series of studies on the performance of search funds.  These studies endeavor to gather data and gain insight into all known search funds.  The studies aggregate the characteristics of search funds, present their principals’ backgrounds, and evaluate the investment returns generated by first-time search funds to their original investors.  The data also tracks changes in the characteristics of search fund entrepreneurs and the performance of their funds over time.  This report includes data as of December 31, 2015, updating the previous study with search fund activity during 2014 and 2015.  For this study, using conservative assumptions, the aggregate pre-tax internal rate of return of the search fund asset class through year-end 2015 is 36.7 percent, and the aggregate pre-tax return on invested capital is 8.4x.