A search fund is an investment vehicle, conceived in 1984, through which investors financially support an entrepreneur’s efforts to locate, acquire, manage, and grow a privately held company.
The model offers relatively inexperienced entrepreneurs with limited capital resources a quick path to managing a company in which they have a meaningful ownership position.
Since 1996, CES has conducted a series of studies on the performance of search funds. CES has identified and tracked more than 400 search funds raised since 1984 in the United States and Canada. The growing cohort of international funds located throughout western Europe, Latin America, and India are tracked by our counterparts at IESE Business School in Barcelona, Spain.
A 2020 CES analysis of 401 qualifying search funds (linked below) found the aggregate pre-tax internal rate of return to be 32.6%, and the aggregate pre-tax return on invested capital to be 5.5x.