Welcome to Family Office Fundamentals, your go-to podcast for navigating the intricate world of family offices with clarity and confidence. Join us as we delve into the essentials of trust and estates, unravel the complexities of budgeting and accounting, explore innovative investment strategies, and offer insights into managing intricate family dynamics. Whether you're a seasoned family office professional or just beginning to explore this realm, tune in to gain valuable knowledge and practical advice to enhance your financial management skills and family relationships. Let's build a stronger foundation together on Family Office Fundamentals.
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Welcome to Family Office Fundamentals, your go-to podcast for navigating the intricate world of family offices with clarity and confidence. Join us as we delve into the essentials of trust and estates, unravel the complexities of budgeting and accounting, explore innovative investment strategies, and offer insights into managing intricate family dynamics. Whether you're a seasoned family office professional or just beginning to explore this realm, tune in to gain valuable knowledge and practical advice to enhance your financial management skills and family relationships. Let's build a stronger foundation together on Family Office Fundamentals.
SBIC: Historical Performance Report with Brett Palmer and Greg Brown
Family Office Fundamentals
37 minutes 22 seconds
1 year ago
SBIC: Historical Performance Report with Brett Palmer and Greg Brown
In our fourth episode of "Family Office Fundamentals," we focus on the impressive performance and impact of Small Business Investment Companies (SBICs). Our special guests are Brett Palmer, President of the Small Business Investor Alliance (SBIA), and Gregory Brown, Professor at UNC Kenan-Flagler Business School and Research Director at the Institute for Private Capital.
We discuss the findings of a recently published White Paper titled "The Performance of Small Business Investment Companies" by the Institute for Private Capital. Key insights include:
1) Over the 2000-2020 period, SBICs achieved an average internal rate of return (IRR) of 16.9%, which is 4.13% higher than a comparable set of non-SBIC peer funds.
2) The average multiple on invested capital (MOIC) for SBICs is 2.3x, outpacing comparable non-SBIC funds by 0.74x.
3) Optimal leverage ratios for SBICs range from 1.00x to 1.75x, indicating that balanced leverage optimizes returns while mitigating risk.
The White Paper uses a survey of SBICs and MSCI-Burgiss data to show that SBIC funds outperform their peers by about 4% in IRR and 0.7x in MOIC. Additionally, Kaplan-Schoar public market equivalents (PMEs) reveal SBICs outperform public benchmarks, with larger funds generating higher returns when controlling for factors like vintage year and strategy.
Our discussion covers the methodology of data collection and analysis, the report's findings, and how SBICs contribute to community and economic support beyond financial returns. Discover how SBICs not only outperform their peers but also play a crucial role in fostering economic growth and community development. Tune in to hear expert insights on why these investment vehicles are a hidden gem in the world of private markets.
Please find the publication here : https://uncipc.org/index.php/publication/the-performance-of-small-business-investment-companies/
Family Office Fundamentals
Welcome to Family Office Fundamentals, your go-to podcast for navigating the intricate world of family offices with clarity and confidence. Join us as we delve into the essentials of trust and estates, unravel the complexities of budgeting and accounting, explore innovative investment strategies, and offer insights into managing intricate family dynamics. Whether you're a seasoned family office professional or just beginning to explore this realm, tune in to gain valuable knowledge and practical advice to enhance your financial management skills and family relationships. Let's build a stronger foundation together on Family Office Fundamentals.
