Assertion Supported AI assessment confidence: 92% certainty 4/5 debate potential 4/5

The average private equity firm created zero real value over a decade

Stan Miranda · Stan Miranda – Modern Endowment Model at Partners Capital (EP.334) · Aug 21, 2023 · at 40:49

Stan Miranda, founder of Partners Capital, breaks down private equity return attribution over the prior decade with Ted Seides.

0:00 / 0:42exact quote · 42.2s

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“The average private equity firm over the last 10 years earned 15% net. Seven and a half percent of that was from multiple expansion, which is basically referencing the public equity markets, multiples, and those companies get valued in line with those, and so they went up by 7.5% because of the last 10 years growth of the public equity markets on the back of the global financial crisis. The other seven and a half percent Is rather pedestrian average earnings growth combined with some inflation in there. So there's no real value added from the average private equity firm, even in the last 10 years, if you adjust for the public equity multiples and the debt aspects of it.”

quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →

The claim, plainly

The average private equity firm generated a 15% net return over the 10 years prior to 2023, with 7.5% driven by public equity multiple expansion and 7.5% by earnings growth and inflation, resulting in no real value-add after adjusting for multiples and debt.

a quote alone can be ambiguous, so this restates it with the references and context of the conversation around it resolved. AI-written; the tape below the player is the source.

Assessment

Industry benchmark reports from Cambridge Associates, Preqin, Burgiss (MSCI), and the American Investment Council confirm that pooled 10-year net annualized internal rates of return (IRR) for private equity buyout funds leading up to 2022/2023 averaged approximately 14% to 16.4%, centering on roughly 15%. Furthermore, empirical return attribution studies by Bain & Company (using CEPRES/StepStone data), McKinsey & Company, and PitchBook show that multiple expansion accounted for roughly 48% to 56% of total buyout value creation across the 2010–2022 post-GFC cycle (representing ~7.5 percentage points of a 15% return), while the remaining ~50% (~7.5 percentage points) was driven by revenue growth, margin expansion, and inflation.

Cambridge Associates and Burgiss (MSCI) 10-year net IRR benchmarks for private equity/buyout vintages leading up to 2022/2023 settled between 13.0% and 16.4%, aligning with the 15% net return figure.
Bain & Company Global Private Equity Reports (2022/2023) showed multiple expansion drove 48% (2010–2015) to 56% (2016–2021) of realized buyout value creation (roughly 50% across the full cycle), with the remaining half driven by revenue and margin growth.
McKinsey & Company and PitchBook historical attribution data confirmed that multiple expansion and leverage accounted for ~50% to 60% of post-GFC buyout equity returns, with fundamental EBITDA growth delivering the remainder.

Checked against

[1] pipelineroad.com [2] investmentcouncil.org [3] investmentcouncil.org [4] ara-advisory.com [5] alphafmc.com [6] bain.com [7] notable-investors.com [8] scribd.com

Bain private equity report return attribution multiple expansion earnings growth "Bain" "Global Private Equity Report 2022" "value creation" "multiple expansion" "revenue" "margin" Burgiss MSCI private equity 10 year net IRR 2022 2023 Cambridge Associates private equity index 10 year net return 2022 2023 McKinsey Global Private Markets Review 2023 10-year buyout return multiple expansion PitchBook "value creation" "multiple expansion" buyout return attribution 2023 "Bain & Company" "multiple expansion" "50%" OR "half" buyout returns "value creation"

assessed as of 2026-09-02

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Partners Capital private equity

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