How LPs can source consistent, top-performing GPs using a unified markets data and analytics platform

In today’s private markets environment of slow exits, high liquidity constraints, and moderate growth, private capital investors would do well to focus not only on identifying top-performing fund managers, but those whose performance is consistent and repeatable.

The widening dispersion in fund performance means this is more important than ever. Preqin data shows a growing gap between first- and fourth-quartile median net IRRs for buyout funds. For 2000 to 2021 vintage funds, the gap has been high, averaging 24.1 percentage points (ppts) (Fig. 1). Although this could partly be due to early‑vintage IRR volatility, recent years have seen even higher dispersion, with 36.7ppts in 2022 vintage funds and 48.5ppts in 2023.

Fig. 1: The dispersion between top and bottom performing buyout funds is widening
Median net IRR (%) for first quartile and fourth quartile buyout funds globally, 2000–2023

To evaluate whether a manager’s historical outperformance can be sustained in future vintages, LPs need to run value-creation analysis of past returns. This enables them to distinguish between returns generated through operational improvements (such as revenue growth and EBITDA margin expansion) and cyclical or market-dependent factors (changes in net debt or multiple expansion).

Returns generated through operational improvements tend to be more resilient and repeatable across market cycles. Those driven by market-dependent factors are harder to control and sustain through different cycles.

To improve the manager selection process, investors need granular asset-level data—but struggle to access it in a standardized, consistent way

LPs are increasingly seeking asset-level data that can be broken down by sector, geography, strategy, investment professional, entry valuation, and exit multiples. This helps them understand:

• Which sectors and geographies have contributed most to realized performance
• How loss ratios vary across strategies and investment partners
• Whether deal outcomes are widely distributed or overly dependent on a few winners
• Whether returns come from operational improvement or multiple expansion

But this requires granular data, robust methodologies, and significant analytical effort—resources that are often stretched across growing private markets portfolios.

Data provided by GPs often comes in disparate formats, with inconsistent definitions or unstructured fields. It makes standardization difficult. Investment teams can spend disproportionate amounts of time cleaning, mapping, and rebuilding datasets before any real evaluation begins. This manual and fragmented process limits the number of managers that LPs can review in depth and can impede their search for top-performers.

This raises the need for investors to conduct essential asset-level analysis in a structured, scalable way, without the burden of navigating disparate GP datasets. To meet this challenge, eFront Insight now incorporates Preqin market intelligence and benchmarking alongside eFront analytics and managed data services, allowing LPs to outsource the collection, validation, and processing of fund and asset-level data

Case study: a value-creation analysis to evaluate fund manager performance

Using these new capabilities, investors can evaluate return drivers and strengthen their forward-looking conviction in potential managers.

Deal-level data across funds can be standardized, together with the use of peer group benchmarking, to consider a fund’s value-creation profile in the context of market conditions, and the sectors and vintages it invested in.

For example, an LP assessing GP X’s strategy could examine the value-creation drivers of its past funds and contrast them with the customized peer group benchmark available on the platform.

In the case of Fund X, every dollar invested generated a gross return of $2.24, comparable to the benchmark’s $2.82. But the decomposition showed that portfolio companies experienced declining revenue and EBITDA margins. Very little value came from operational improvement; instead, most of the performance (1.78x) was driven by rising market multiples. Comparable deals in the broader market had a much larger share of value created through revenue growth (3.01x) than changes in multiples or net debt (Fig. 2).

Fig. 2: Fund X performance was driven by growing multiples, and comparable deals by revenue growth
Value creation drivers for sample fund X and customized peer group benchmark

Fund X

Peer group benchmark

These insights raise important questions about the durability of GP X’s strategy. In a higher interest rate environment, where debt is more expensive and valuation uplift is harder to achieve, managers cannot rely on leverage or multiple expansion to drive returns.

With greater transparency into how value is created, LPs are better equipped to answer critical pre-investment questions, including:

• How much value has been generated across a manager’s funds, and how consistently?
• How does this compare with an appropriately calibrated peer group?
• What were the primary drivers of returns?
• How repeatable is the quality of that value creation across deals and cycles?

End-to-end workflows powered by market data

This value-creation analysis is an example of how eFront Insight, with Preqin inside, enables LPs to digitize and standardize GP data for faster, more accurate analysis; perform attribution and prepare diligence materials efficiently; and view manager performance against benchmarks and peer groups for deeper insights.

Beyond these pre-investment capabilities, the platform also provides a comprehensive set of post-investment capabilities, including portfolio monitoring, exposure analysis, performance benchmarking, reporting at scale, fee oversight, and risk analytics.

eFront® Insight, with Preqin inside, delivers a holistic, pre- and post-investment solution for investors to plan, construct, and manage private market portfolios. Enriching the eFront platform’s analytics, workflows, and managed data services with premium market data provides LPs with a single ecosystem to make better decisions and unlock value across the entire investment lifecycle within the context of the market. To find out more about eFront Insight, click here.