2020 Search Fund Study: Selected Observations
August 13, 20202020|Case No.E726| Length 32 pgs.
Since 1996, the Center for Entrepreneurial Studies at Stanford Graduate School of Business 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.
The 2020 Search Fund Study reports on the financial returns and key qualities of search funds formed in the United States and Canada since 1984. This report updates the previous 2018 study with data through December 31, 2019.
For this study, using conservative assumptions, the aggregate pre-tax internal rate of return of the search fund asset class through year-end 2019 is 33.6 percent, and the aggregate pre-tax return on investment is a 5.5x ROI.
The search fund study is intended to provide investors, existing searchers, and prospective searchers with key demographic and financial information for this rapidly growing asset class.
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