NAIC Membership Profile
NAIC represents a vibrant and growing population of diverse-owned private equity firms and hedge funds, with a track record and ongoing performance that is competitive with the broader market. In a recent study, upper quartile Diverse PE Funds in the NAIC Private Equity Index outperformed the upper quartile funds in both U.S. Buyout and U.S. Private Equity cohorts. Consequently, a growing number of institutional investors are allocating increased capital to our members as evidenced by frequent over subscription.
NAIC members cover the broad spectrum of diversity. People of color and women are in leadership positions at all NAIC member firms.
The NAIC is comprised of more than 100 member firms, inclusive of venture capital firms, buyout firms, private equity funds and hedge funds.
NAIC Member Fundraising
Since 2010, Annual Fundraising for NAIC Membership has grown 2,000%.
However, nearly half comes from public pension funds (Figure 2). This may likely be due to an increase in the number of emerging and diverse programs over the last five to seven years. Funds of funds and “other” investors, including insurance companies, foundations and government agencies, are the next two largest investor groups.
NAIC Member Investments and Deals
NAIC represents a vibrant and growing population of diverse-owned private equity firms and hedge funds, with a track record and ongoing performance that is competitive with the broader market. In fact, in a recent study, upper quartile Diverse PE Funds in the NAIC Private Equity Index outperformed the upper quartile funds in both U.S. Buyout and U.S. Private Equity cohorts. Consequently, a growing number of institutional investors are allocating increased capital to our members as evidenced by frequent over subscription.
Between 2010 and 2019, dealflow through NAIC membership, in aggregate, has increased 680% (Figure 2).
Invested in Member
Employees at NAIC Member Portfolio Companies by State
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Total Employees: 2,221,483
Internationally, NAIC portfolio companies employ over 735,000 employees.
NAIC Member Firm Investments
NAIC members invest in companies that employ 1.4 million employees in the United States and over 2.2 million employees globally. Private equity allows these companies to grow, hire more staff, and create broader wealth distribution. NAIC member portfolio companies specialize in a wide range of industry sectors. These companies hire employees in healthcare, restaurants and hotels, retail, software and more. IntelligentNAIC has compiled a list of the Top 10 industry sectors where NAIC member firms have investments.
Global Employee Impact by Industry
NAIC Members have international investments that employ 737,635 employees internationally. *(All data as of May 1, 2020)
NAIC Member Performance and Analysis
For the period 1994 through 2018, diverse PE funds, represented by the NAIC Private Equity Index, recorded a net IRR of 18.96 percent, a net MOIC of 1.54x and DPI of 0.69x. For the continuous reporting period of 2011 to 2018, the NAIC Private Equity Index reported a net IRR of 20.99 percent, a net MOIC of 1.48x and a net DPI of 0.53x.
Implications for Investors
Diverse private equity managers have once again proven to be a fertile hunting ground for alpha generation. In addition, because returns are produced through diverse deal flow and thinking, it may be possible for investors in women- and diverse-led private equity funds to further diversify their investments, even within their private equity allocations.
NAIC Private Equity Index Versus Burgiss Median Quartile by Vintage Year
Research is the foundation for every investment decision and often helps drive investor behavior. The NAIC publishes studies that offer in-depth insight into the performance of diverse managers, the industries in which they invest and the benefits of instituting emerging manager programs.
2019 Performance Study
Diverse-owned private equity firms continue to outperform their benchmarks, according to Examining the Returns 2019: The Financial Returns of Diverse Private Equity Firms, a study released today by the National Association of Investment Companies (NAIC). Despite delivering consistent returns, diverse- and women-owned firms collectively manage only 1.3 percent of the investment industry’s $69 trillion in assets under management.
The Managers in the Market (MINT) Report is a quarterly compendium of tear sheets for NAIC Member firms that are currently fundraising, have recently closed funds or have funds that are coming to market within the next twelve months. The MINT Report is widely distributed to a growing list of over 100 institutional investors nationwide and serves as a special resource for allocators seeking to invest with high-performing diverse managers. To request access to the distribution list, click below.
Since 2014, 15 diverse-owned firms have raised 21 oversubscribed funds, highlighting investor interest in our members’ investment strategies and their long standing track record in delivering superior returns for limited partners. The following are some of the recently oversubscribed funds that were raised by NAIC members:
NAIC Home Run Club
The NAIC Home Run Club recognizes deals completed by NAIC member firms that have returned at least 4X to their limited partners. This will be an ongoing tribute to those diverse managers who have generated superior return.
Perspectives is a video web series hosted by the National Association of Investment Companies that provides a look into the world of diverse investment managers and the industries in which they do business. Important industry news, the latest trends, and groundbreaking transactions are discussed by the industry professionals and influential deal-makers who make them happen. Select a topic below to view videos related to that topic.