“The news from the front regarding the performance of the large and mega buyout funds is actually much better than expected. In spite of this, a real case can be made for a tactical shift in favor of the middle market in today’s environment. However, any tactical shift should always be seen as an overlay on a thoughtful, defined, and disciplined strategic program. For buyouts, such a program should focus primarily on the risk/return tradeoff inherent within the buyout space, and how that fits within an institution’s risk tolerance, its ability to absorb additional risk, its stage of development, and resources that can be dedicated to managing the risk of investments in the buyout asset class.”

Buyout Funds Large Versus Small.