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Search funds beat VC, private equity returns

via Financial Standard

"Search funds, an investment strategy that sprung from the hallways of two Ivy league universities in the US, have reached Australia, grabbing the attention of investors drawn to the new business model and returns in excess of 30%.

Developed by universities Harvard and Stanford in 1984, the search fund model supports entrepreneurs in purchasing a single small business by kicking off a capital-raising process where around $500,000 to $700,000 is initially secured to begin the search for a business.

However, it took some time for the notion to reach our shores, with the first local fund only launched in 2019. Currently, it's estimated there is more than 10 search funds operating in Australia, with the number expected to hit 20 in 2024."