The IESE International Search Fund Study
The International Search Fund Center at IESE Business School (Barcelona) publishes the definitive longitudinal study on search fund activity outside the United States and Canada. The 2024 edition — covering data through December 31, 2023 — tracks 320 international search funds across 40 countries, making it the most comprehensive dataset available on the global ETA ecosystem.
Understanding the difference between US/Canada search fund performance and international performance is essential for both international searchers raising capital and for investors evaluating whether to back non-US searchers.
The Returns Gap — and Why It Exists
The headline finding in the IESE 2024 study is a 18.1% aggregate IRR and 2.0x aggregate MOIC for international search funds, compared to 35.1% IRR and 4.5x MOIC for US/Canada funds in the 2024 Stanford study. This gap is significant and warrants explanation.
International search funds face structural challenges that their US counterparts do not:
Market maturity. The search fund model originated in the United States and is deepest there. The ecosystem of advisors, lenders, diligence providers, and experienced search fund investors is far more developed in the US. International searchers often navigate markets where the concept of an entrepreneurial acquisition is new and the financing infrastructure is immature.
Financing access. The SBA 7(a) loan program — which allows US searchers to finance 80–90% of an acquisition with government-guaranteed debt — has no equivalent in most international markets. International acquisitions typically require larger equity checks, more complex debt arrangements, or seller financing structures that are harder to execute.
Market depth. The pool of quality acquisition targets in most international markets is smaller, and seller familiarity with the search fund acquisition model is lower. Sellers who have never heard of a search fund acquisition may take longer to engage or price transactions differently.
The Growth of International ETA
Despite the returns gap, the international search fund market is growing rapidly. The IESE study notes that 62% of all international acquisitions ever tracked occurred after 2020 — a clear acceleration. The ecosystem of experienced international search fund investors, legal advisors, and supporting infrastructure is developing quickly in key markets.
Known positive exits by geography in the IESE dataset: Mexico (7), United Kingdom (3), Spain (2), and one each in Brazil, Chile, and Italy. Mexico and the UK represent the most developed international ETA markets outside the US and Canada.
What International Searchers Need to Know
International searchers face higher barriers in the capital raise. Many traditional US search fund investors have geographic restrictions (US/Canada only) in their mandates. This limits the investor universe for international searchers to:
- International-focused search fund investors (growing but still limited) - Local family offices and HNW individuals in the searcher's home market - Investors with specific geographic expertise or portfolio interests in that region - Searchers willing to structure deals that attract US investors despite geography
The financing gap is the largest structural challenge. Searchers in markets without SBA-equivalent programs should plan for equity-heavy capital structures: 30–40% equity injection rather than the 10–15% achievable with SBA financing in the US. This increases the equity round size, raises the bar for investor access, and compresses returns.
What Investors Need to Know
The 18.1% IRR for international search funds is not a failure — it is still a meaningful return relative to alternatives in most international private markets. The IESE study also reports a top-performing fund return of 31.4x, indicating that exceptional outcomes are achievable internationally even if the aggregate is lower.
Investors considering international ETA should discount for: - Longer timelines to close (financing complexity, legal differences) - Currency risk in non-USD markets - Less mature advisor and diligence infrastructure - Smaller universe of precedent transactions for benchmarking
The key judgment is operator quality. A highly capable operator in an immature market can generate exceptional returns precisely because competition is lower and seller expectations are often more reasonable than in the developed US search market.
Mayfaire Row's International Thesis
We actively back international and minority-founded searchers where we see strong operator quality — regardless of geography. The market immaturity that creates challenges for international searchers also creates opportunity for investors who can navigate it. We have built deal sourcing infrastructure and an investor network that supports non-US transactions, and we look at every deal on its own merits.
*Sources: International Search Fund Center, IESE Business School, "2024 International Search Fund Study" (data through December 31, 2023), tracking 320 funds across 40 countries; Stanford Graduate School of Business, "2024 Search Fund Study" (for US/Canada comparative data). Past performance is not indicative of future results.*