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ABRY, HIG Capital are most sought-after US mid-market LBO firms

The firms were the only ones rated excellent by Setter Capital in its list of 35 most sought-after US mid-market buyout managers.

Boston-based ABRY Partners and Miami’s HIG Capital topped a new ranking of the 35 most sought-after US mid-market buyout managers in the secondaries market in the second quarter, according to a list released Thursday by Toronto-based advisory firm Setter Capital.

These two buyout firms were the only ones rated excellent. The top three firms among those rated very good were Friedman Fleischer & Lowe, Genstar and JLL Partners. There 12 fund families rated very good and 21 rated good.

The funds of most sought-after managers price on average about 9 percent better than funds of unrated managers, Setter noted.

Additionally, those popular funds have typically performed better, with an average internal rate of return of 16 percent, than those of unrated managers, which have an average IRR of 14 percent. They’ve also raised more money, with their average fund size being $1.5 billion versus $684 million for unrated managers.

Here are the 10 most sought-after US mid-market buyout funds:

  • ABRY
  • HIG Capital
  • Friedman Fleischer & Lowe
  • Genstar
  • JLL Partners
  • Audax Private Equity
  • Riverside Capital Appreciation Fund
  • Charlesbank Capital Partners
  • Accel-KKR Capital Partners
  • Littlejohn & Co

There were no new entrants in the ranking compared with Setter’s previous ranking.

Setter Capital based its rankings on its Setter Liquidity Ratings, which rates fund families as excellent, very good, good and unrated, depending on how desired and saleable they are on the secondary market. The ratings are also in large part determined by a shortlist of more than 1300 buyers that Setter covers, including via its SecondaryLink platform.

The full list can be found here.