Search Fund Research Report

Search funds, vehicles in which a searcher raises capital from investors to find, buy, and personally run a single established company, are scaling on nearly every tracked measure: Stanford GSB now counts 862 traditional funds in the United States and Canada, with new formation at or near record highs from 2023 through 2025.¹ A separate international universe tracked by IESE reached 503 core funds by year-end 2025, up from 83 in 2018.^{1, 2}

This research report organizes the search fund statistics by what they measure: formation and adoption, searcher demographics, globalization, deal profiles, and returns read with their denominators.

This research report organizes the search fund statistics by what they actually measure, leading with adoption, demographics, and globalization and keeping returns to a single, heavily caveated section. Two facts shape every figure below. The United States and Canada, tracked by Stanford, and the rest of the world, tracked by IESE, are separate and non-blendable universes at different stages of maturity, so the two are never added into one global total or averaged. And the rigorous studies cover only traditional, multi-investor funds, a documented minority of all ETA activity; the more numerous self-funded model has no comparable dataset. Every precise figure here is sourced, with its data year and geography stated.

Current market context: Formation held near record highs through 2025, but the newest cohorts are finding it harder to close. Among funds launched in 2021 to 2024, about 48% acquired a company, down from the 58% all-time rate, which the 2026 study attributes to tougher deal conditions and a wider range of searcher preparedness as the model has grown more popular.¹ Aggregate returns held roughly steady over the same period, at 33.9% IRR and a 4.75x ROI.¹

Metric note: Four distinctions decide whether these numbers are read correctly. Funds tracked, acquisitions closed, and exits completed are three different stages of the same universe (internationally, 503 funds, about 220 acquisitions, and comparatively few full exits), so the fund count never stands in for deal maturity. Aggregate returns are dollar-weighted and include failures, so they are not medians. The two geographies are separate populations. And the studies cover core funds, not all ETA. The methodology section keeps these denominators apart.

Contents

1. What the Search Fund Datasets Actually Count
2. From Niche to Movement: The Search Fund Adoption Curve
3. Who Is Searching Now
4. The Model Went Global Faster Than It Got Old
5. What Searchers Buy, and How the Search Is Structured
6. Search Fund Returns, in Context
7. The Largest Part of ETA Is the Least Documented
8. How Individual Investors Reach This Opportunity Set
9. What This Data Tells Investors
10. Search Fund and ETA FAQ
11. Methodology and Caveats

What the Search Fund Datasets Actually Count

A traditional or core search fund is a multi-investor vehicle: the searcher raises a modest amount of search capital from roughly a dozen or more investors, and those backers typically hold the right to invest pro rata in the eventual acquisition. The two studies that anchor this article both count that model and only that model. They exclude self-funded searches, single-investor deals, accelerators, and entrepreneur-in-residence arrangements.¹ That scope is the most important thing to understand before reading any search fund statistic, because the same words describe different populations depending on who is counting.

The table below separates the denominators that get collapsed most often. Keeping them apart is what prevents a U.S. figure from being labeled global, a fund count from being read as a record of completed deals, or a dollar-weighted aggregate from being mistaken for a typical fund.

Sources: Stanford GSB 2026 Search Fund Study; IESE International Search Funds 2024; Stanford GSB 2022 Search Fund Study (historical counts). The two studies are separate universes and are not combined.

From Niche to Movement: The Search Fund Adoption Curve

The clearest evidence that ETA has crossed from obscure path to asset class is not any single year’s return. It is the trajectory of formation. In the United States and Canada, the tracked universe has grown from roughly 20 funds in 1996 to 401 by 2020, 681 by 2024, and 862 by the 2026 edition, with new formation peaking in 2023 and holding near record highs in 2024 and 2025.¹ Acquisitions lag launches by design: company acquisitions peaked in 2021 and declined year over year through 2024, with a modest uptick in 2025.¹

Stanford does not attribute the formation uptick to any single cause, but to three reinforcing ones: wider education about the model, a growing pool of search-fund investors, and an expanding base of lenders comfortable financing these acquisitions.¹ Two of those show up directly in the data as infrastructure. The share of searchers who arrived having taken a dedicated ETA course rose from 37% to 48% to 61% across the three most recent cohorts, and Stanford’s Search Fund CEO Conference grew from roughly 230 attendees at its 2017 debut to nearly 500 at the fifth edition in 2025.^{1, 4}

One number keeps the adoption story honest, and it has moved. Across the full history, about 58% of concluded searches ended in an acquisition; for funds launched between 2021 and 2024 the rate is 48%, which the 2026 study attributes to less-favorable deal conditions and a wider range of searcher preparedness as the model has grown more popular.¹ A meaningful and rising share of searchers never reach the operator’s seat, which is the first place the model’s reputation and its reality diverge.

Who Is Searching Now

As formation has risen, the people doing it have broadened, by gender, by education, and by professional background. The honest framing carries the trend and the absolute level together. Female searchers rose from about 11% in the 2020-21 cohort to 17% in 2022-23, then eased to 14% in 2024-25, so the trend is up off a low base but not a straight line.¹

About 80% of the most recent cohort hold an MBA and roughly 83% are 35 or younger, so ETA remains a young person’s path even as it widens beyond its business-school core.¹ Ethnic diversity has continued to broaden: about 47% of the 2024-25 cohort identify as Asian, Black, Hispanic or Latino, or another non-white background.¹

The shift by profession is as notable as the shift by demographics. Management consulting is now the single most common background, at 19% of the 2024-25 cohort, narrowly ahead of private equity at 18% and investment banking or finance at 15%.¹ Private-equity veterans, who made up more than a quarter of searchers in the model’s earlier cohorts, have settled at about 18%, a sign the entry pool has broadened well beyond its finance core.¹

The Model Went Global Faster Than It Got Old

The returns-led version of the search fund story usually omits the geography, and the geography is the most differentiating part of the data. Outside the United States and Canada, IESE tracks a separate universe that has grown roughly six-fold since 2018: from 83 first-time funds in its 2018 edition to 211 in 2022, 320 in 2024, and 503 core funds by year-end 2025, spanning more than 40 countries.^{1, 2, 7, 8}

The 2025 total comes from the 2026 Stanford study, reported through its partnership with IESE; the international demographic and return detail below still reflects IESE’s 2024 edition, and should be refreshed once updated IESE 2026 detail is obtained and verified. These are cumulative counts reported per edition, not a smooth annual line, and this universe is the non-blendable counterpart to Stanford, never averaged with it.

The spread is concrete and recent. The first international fund was raised in the United Kingdom in 1992, and from 2003 the model reached Latin America, Europe, Africa, Asia, and Australia.² In 2024 and 2025, first searches launched in eight more countries (Malaysia, Norway, Saudi Arabia, Singapore, Taiwan, Thailand, Turkey, and Uruguay), and first acquisitions closed in three others (South Africa, Austria, and India).¹ Across the years tracked, the most active markets by first-time funds are Spain, Mexico, the United Kingdom, and Brazil.³

Where deals have actually closed is the distinction that matters most for reading international returns. In IESE’s 2024 edition, 85 acquisitions were in Europe, 54 in Latin America, 5 in Asia-Pacific, and one each in the Middle East and Africa, about 146 in total.² The 2026 Stanford study puts the international count higher, reporting 220 international acquisitions and a 72% acquisition rate among concluded international searches, with the updated regional split awaiting refreshed IESE detail.¹ The gap between funds tracked and acquisitions closed is the point: most international funds are still searching or have only recently bought, and only a small number have fully exited.

The international searcher base, per IESE’s 2024 edition, is localizing while keeping the same diversity gap seen in North America. The share of international searchers holding U.S. MBAs has fallen to about 42%, from roughly 50% and about 69% in earlier studies, a sign the model is taking local root rather than being exported.² Women are about 7% of international searchers, below the U.S./Canada level and far below their presence in management.² Education is institutionalizing abroad too: 47% of international searchers since 2021 had taken an ETA course, IESE’s search-fund elective is among its most popular, and more than 60 IESE graduates have raised funds across 20 countries.^{2, 5}

What Searchers Buy, and How the Search Is Structured

The target profile grounds the abstract growth story in concrete businesses: profitable, durable, often unglamorous lower middle market companies. Acquisitions concentrate in a handful of sectors. In the 2026 study, services remained the most common sector for acquired companies, followed by software; education, particularly credentialing and vocational training, reached its highest-ever number of acquisitions, and tech-enabled services and healthcare stayed popular.¹ Most searchers still buy close to home, with about half acquiring in the same state or region where they searched.¹

The deal itself is small and cash-generative. The median 2024-25 U.S./Canada acquisition was $16.0M of enterprise value, the second-highest on record, at a 6.2x EBITDA multiple that eased from about 7x in the two prior cohorts, with a 25% margin and $2.5M of EBITDA; across all acquisitions since inception the median purchase price is $13.5M at 6.3x, and the median search runs about 20 months.¹ Specifying which window a median describes matters, because the recent cohort and the full history are different bases.

The mechanics differ between the two universes in ways worth keeping separate rather than blended. The table below sets the U.S./Canada and international figures side by side. It is a comparison of two distinct studies, not a single global picture, and the international universe is younger, so the columns are not directly comparable on maturity.

Sources: Stanford GSB 2026 Search Fund Study (U.S./Canada column, through year-end 2025); IESE International Search Funds 2024 and IESE Insight (international column; the 2024 edition is the latest with this detail, with a 2026 IESE report pending). Fund counts are current to year-end 2025 in both columns. A side-by-side comparison of two separate studies; figures are never averaged into a single number. The international book is younger and largely unexited, so the columns are not directly comparable on maturity.

Search Fund Returns in Context: IRR, ROI, and Exit Data

Search fund returns are strong in aggregate, and they are the most heavily caveated figures in the model. Across all U.S. and Canadian search funds since 1984, the aggregate pre-tax return to original investors was 33.9% IRR on a 4.75x ROI (return on investment, the multiple of invested capital the study reports, sometimes called MOIC).¹ IRR eased slightly from the prior study’s 35.1% while ROI rose from 4.5x, which the study attributes to CEOs holding companies longer.¹

The headline is dollar-weighted and lifted by a handful of exceptional exits, so it is neither a median nor a typical fund. Excluding funds that returned 10x or more, the aggregate falls to 2.8x ROI and 27% IRR; excluding the top 10% of funds by ROI, it drops to 2.1x ROI and 20% IRR.¹ Fully exited search funds, a more seasoned subset, show a higher IRR of 39.3% and a 5.98x ROI, a slight decline from the prior study’s 42.9% but within the historical range; including unsuccessful searchers, exited-fund returns are 35.3% IRR and 5.61x ROI.¹

Measured against public markets, the model has outperformed. The 2026 study introduces a public-market equivalent (PME) that compares each fund’s cash flows to what the same money would have earned in the S&P 500 over the same period, where 1.0 matches the index. Search funds as a group returned a PME of 2.88, and exited funds a PME of 3.59, so the group roughly tripled what public markets would have delivered over the same windows.¹ Like the aggregate return, the PME is lifted by the same handful of outliers, and recent cohorts still sit near 1.0 while their companies are early in the hold.

The full distribution is the most honest single view of outcomes. Among acquired companies with a return to date, about 74% produced a gain and roughly 26% a loss.¹ The chart below shows the share of acquisitions in each return band, which is a different base from the share of gains.

Internationally, per IESE’s 2024 edition, the aggregate was 18.1% IRR on 2.0x, with a median fund of 1.4x.² Read alone, that looks like underperformance against the U.S./Canada figure. It is not. The international universe is young and largely unexited, with 62% of its acquisitions in that edition made since 2020 and only 21 reported exits, 15 with positive returns and six at a loss, so the lower numbers reflect timing rather than quality.² The international count has since grown to 503 funds and 220 acquisitions, leaving the book larger and still lightly realized; updated international returns should be refreshed once updated IESE 2026 detail is obtained and verified.¹

Two further points keep the aggregate in proportion. Stanford itself excludes its largest outliers from some return calculations, a discipline that underscores how much a few funds move the headline.⁹ And the long-hold heritage behind the model’s reputation is real but unusual: a study of the first seven search funds found that five held their companies more than 10 years and three more than 20.⁴ Those founding-era holds are the origin of the model’s compounding story, not a description of a typical hold today.

The Largest Part of ETA Is the Least Documented

Everything above describes traditional, multi-investor core funds. The fastest-growing edge of entrepreneurship through acquisition is arguably elsewhere: self-funded acquisitions, typically financed with SBA 7(a) loans, in which the searcher keeps most of the equity and the businesses are smaller, often in the $1M to $10M range. It is widely considered the most numerous form of the model, and it has been popularized further by the online interest in buying small, durable, owner-operated companies.¹

It also sits outside the rigorous datasets. No authoritative return or formation series exists for self-funded search, which is a genuine data gap rather than a research oversight. The practical implication is twofold. The headline figures in this article describe a documented institutional minority, not the whole of ETA. And the core-fund returns above should not be extrapolated to self-funded deals, which carry different structures, leverage, and risk. Where self-funded activity appears in these pages, it is qualitative context, not measured data.

How Individual Investors Reach This Opportunity Set

The studies measure an institutional model, but the growth they document widens the pool of small private acquisitions an individual investor could plausibly back. Two different questions sit behind a reader’s interest here. One is how big and fast-growing ETA is, which the data answers. The other is how an accredited investor participates, which the data does not, and which has more than one answer.

There are a few distinct routes. An investor can back a traditional searcher directly, becoming one of the dozen or so investors in a fund and holding the right to invest in the eventual acquisition. An investor can participate in self-funded or SBA-financed deals, the largest but least documented part of the market. Or an investor can co-invest deal by deal in lower middle market acquisitions, including those led by independent sponsors, dealmakers who raise their equity deal by deal instead of investing out of a committed fund. Independent sponsors are the adjacent and larger model next to the search funds these statistics describe, and the structure each investor chooses determines what they are actually underwriting.

CapitalPad is a private equity co-investment group that lets accredited investors invest, deal by deal, in lower middle market acquisitions, including select post-LOI search fund and self-funded search transactions that fit its operating-company profile.¹⁰ Investors review and select individual deals rather than committing to a blind-pool fund. Its primary focus is independent sponsor-led acquisitions, and it reviews search fund and self-funded search deals at the acquisition stage only, without funding the pre-LOI search phase. For readers who want the participation details, the investor overview explains how deal-by-deal co-investment works.

The structure matters because each route asks the investor to underwrite a different thing. A traditional search fund starts with a searcher and a mandate; a self-funded acquisition starts with a smaller, often more leveraged company; a deal-by-deal co-investment starts with a specific company, operator, purchase price, and exit thesis already on the table. The data above helps frame the real underwriting question: which company, which operator, which capital structure, and which exit path?

What This Data Tells Investors

The adoption story is the most reliable finding in the data. Formation, education, community, and geographic spread all move in the same direction across independent datasets and across two continents. The headline returns, by contrast, are dollar-weighted and carried by a few exceptional exits. An investor or operator drawn to ETA by a 4.75x aggregate ROI is reacting to the least typical part of the data; the durable signal is that the model is institutionalizing, not that any given fund returns the headline.

There are two universes here, not one global number. Stanford and IESE measure different populations at different maturities. The international 2.0x from IESE’s 2024 edition sitting next to the U.S./Canada 4.75x is a J-curve effect, with the large majority of international acquisitions made only since 2020, not a verdict on the quality of international searchers. The most common error in reading search fund statistics is collapsing the two into a single global figure or treating the younger book as underperformance.

The base is broadening by profession as much as by demographics. Private-equity veterans have fallen from more than a quarter of searchers in the model’s earlier cohorts to about 18%, with management consulting now the most common background, even as female participation rose from roughly 11% to 17% before easing to 14% in the newest cohort. Both are real trends, and neither implies parity; the female share is about 14% in the U.S. and Canada and about 7% internationally. The widening entry pool changes who an investor is actually backing when they back a searcher.

The headline figures describe a documented minority. Traditional multi-investor funds are a fraction of all ETA activity. The most numerous model, self-funded and SBA-financed search, has no rigorous dataset at all. Any statement that search funds return a particular number is a statement about the documented institutional slice, and it should not be stretched to cover the larger, undocumented part of the market.

Dispersion is the practical underwriting point. About 26% of acquired companies show a loss, and excluding funds that returned 10x or more the aggregate falls to 2.8x ROI. In a market with outcomes that wide, the asset-class average is a weak guide to any single deal. Whether an investor backs a fund or co-invests in one transaction, the specific company, sponsor, purchase price, and exit path carry more of the outcome than the headline statistic does.

Search Fund and ETA FAQ

How many search funds are there?

Stanford GSB tracks 862 traditional search funds in the United States and Canada since 1984, and a separate international universe reached 503 core funds, both as of year-end 2025.^{1, 2} The two are separate universes and should not be added into a single global total.

Are search funds becoming more popular?

Search funds are growing on almost every tracked measure: formation held near record highs through 2023 to 2025, the international universe rose from 83 funds in 2018 to 503 by 2025, conference attendance more than doubled since 2017, and ETA coursework climbed from 37% to 61% of searchers. One measure moved the other way: acquisition rates for the most recent cohorts fell to about 48%.^{1, 2, 4}

Who starts search funds?

An increasingly broad group, though from a narrow base. Female searchers rose from about 11% to 17% in the U.S. and Canada before easing to 14% in the newest cohort, ethnic diversity broadened to about 47% non-white, and private-equity veterans fell from over a quarter of searchers to about 18% as management consulting became the most common background.¹ The absolute levels remain low, with women about 7% of international searchers.²

Why are international search fund returns lower than U.S. returns?

Maturity, not quality. In IESE’s 2024 edition, about 62% of international acquisitions were post-2020 with little time to compound or exit, and there were only 21 reported exits, 15 with positive returns and six at a loss.² That aggregate of 18.1% IRR on 2.0x reflects a young, unexited book rather than weaker performance. The international count has since grown to 503 funds and 220 acquisitions, and updated returns should be refreshed once updated IESE 2026 detail is obtained and verified.¹

What is the typical search fund return?

There is no clean typical figure. The U.S./Canada aggregate of 33.9% IRR on a 4.75x ROI is dollar-weighted and outlier-driven, the international median fund is 1.4x (IESE 2024), and about 26% of acquired companies show a loss.^{1, 2} The aggregate is a pool statistic, not a median, and should not be read as an expected outcome.

What kinds of companies do search funds buy?

Profitable lower middle market companies, concentrated in services and software, with education, tech-enabled services, and healthcare also common.¹ The median 2024-25 U.S./Canada deal was $16.0M of enterprise value at 6.2x EBITDA.¹

Which countries have search funds?

Beyond the United States and Canada, the most active markets are Spain, Mexico, the United Kingdom, and Brazil, and in 2024 and 2025 first searches launched in eight more countries, including Malaysia, Norway, Saudi Arabia, Singapore, Taiwan, Thailand, Turkey, and Uruguay.^{1, 3}

What is a self-funded search fund?

A self-funded search runs without committed search capital: the searcher covers the search personally, typically finances the acquisition with SBA debt, and keeps most of the equity. It is the most numerous form of ETA, but no rigorous return or formation dataset exists for it.¹ It sits outside the figures in this article, which cover traditional multi-investor funds only.

How current is this search fund data?

The U.S. and Canada figures come from Stanford’s 2026 edition, with data through year-end 2025.¹ International fund and acquisition counts are also current to year-end 2025 through that study, but the international demographic and return detail still reflects IESE’s 2024 edition and should be refreshed once updated IESE 2026 detail is obtained and verified.²

Methodology and Caveats

Two non-blendable universes. Stanford covers the United States and Canada; IESE covers everywhere else. They are different populations at different maturities, so every figure is labeled by geography, the two are kept in separate sections, and they are never added into one global total or averaged.

The aggregate is not a typical return. The 33.9% IRR on a 4.75x ROI is dollar-weighted across the whole pool, including failures, and is lifted by a few outsized exits. Excluding funds that returned 10x or more the aggregate is 2.8x ROI, and about 26% of acquired companies show a loss. The figure is never presented as a median or an expected outcome.

International returns are a maturity artifact. The international 18.1% on 2.0x, from IESE’s 2024 edition, trails the U.S./Canada figure mainly because most international acquisitions are post-2020 and largely unexited. The international count has since grown to 503 funds and 220 acquisitions; updated returns should be refreshed once updated IESE 2026 detail is obtained and verified, and any international return is paired with that maturity caveat and never framed as underperformance.

Core funds only. Both studies cover traditional, multi-investor core funds. Self-funded and SBA-financed search, the most numerous model, is excluded and has no comparable dataset, so it is treated as fenced, qualitative context with no invented figures.

Counts are revised by edition. Cumulative fund counts differ across editions: 862 in 2026, 681 in 2024, 526 in 2022, and 401 in 2020 for the U.S./Canada series, and the pre-2010 base once folded in international funds. Each count is cited with its edition, and the adoption chart shows four reported snapshots rather than a smooth annual line.

Funds, acquisitions, and exits are distinct. The 503 international funds are not the 220 international acquisitions, which are not the small number of full international exits. The fund count is never used as a stand-in for how mature or how realized the global book is.

Diversity is reported as trend and level. Female participation rose then eased, to about 14% in the U.S. and Canada in the newest cohort and about 7% internationally. Both the direction and the absolute level are stated, and no figure implies parity.

Searcher backgrounds are drawn directly from Stanford. The professional-background breakdown, including the move in private-equity searchers from over a quarter to about 18% and the rise of management consulting to the top spot, is taken from the 2026 Stanford study’s own exhibit, as are the gender, age, education, and ethnicity trends. Earlier versions of this report relied on an aggregator restatement for the background mix; the 2026 edition’s exhibit replaces it.

The return distribution uses one base. The six-band distribution is a share of acquired companies (n = 337), not a share of gains. The four positive bands sum to about 74% and the two loss bands to about 26%. The 8% above 10x is a share of acquisitions and is not the same as the larger share of gains above that level.

Data currency. The U.S. and Canada figures come from Stanford’s 2026 edition (case E-967), with data through 31 December 2025. International fund and acquisition counts are current to the same date through that study, but international demographic and return detail still reflects IESE’s 2024 edition, and should be refreshed once updated IESE 2026 detail is obtained and verified.

Every figure carries its data year and geography. The caveats narrow what the numbers can claim; they do not change what the studies show on their own methodologies: search fund formation is near record levels, the model has spread across more than 40 countries, and its participant base and supporting institutions are wider than at any point in its history, even as recent cohorts find acquisitions harder to close.

Cite this research: CapitalPad Research, “Search Fund Research Report.” Reviewed June 2026. https://capitalpad.com/search-fund-statistics/

Sources & References

1. Kelly, Zenios & Ng, “2026 Search Fund Study: Selected Observations,” Stanford Graduate School of Business, case E-967 (30 June 2026; data through 31 December 2025). https://www.gsb.stanford.edu/faculty-research/case-studies/2026-search-fund-study-selected-observations
2. Kowalewski et al., “International Search Funds 2024,” IESE Business School, study ST-658-E (2024; data through 31 December 2023). International demographic and return detail in this article reflects this edition; international fund and acquisition counts through year-end 2025 are reported by the 2026 Stanford study. Refresh this citation and the international returns section once updated IESE 2026 detail is obtained and verified. https://www.iese.edu/media/research/pdfs/ST-0658-E
3. IESE Insight, “Search funds asset class maintains global growth” (2024). https://www.iese.edu/insight/articles/search-funds-global-growth/
4. Stanford Graduate School of Business newsroom, “Stanford GSB’s Search Fund Conference Focuses on CEOs” (2025). https://www.gsb.stanford.edu/newsroom/school-news/stanford-gsbs-search-fund-conference-focuses-ceos
5. IESE Business School, “International Search Fund Center” (2024). https://www.iese.edu/entrepreneurship/search-funds/
6. Kelly & Heston, “2022 Search Fund Study,” Stanford Graduate School of Business (2022; historical fund counts). https://www.gsb.stanford.edu/faculty-research/case-studies/2022-search-fund-study
7. IESE Insight, “Search funds continue to go global” (2022; historical international counts). https://www.iese.edu/insight/articles/search-funds-continue-to-go-global/
8. IESE Insight, “Search fund model takes root in Europe and Latin America” (2018; historical international counts). https://www.iese.edu/insight/articles/search-fund-model-europe-latin-america/
9. Stanford Graduate School of Business Insights, “How CEOs-in-Waiting Buy the Companies They Want to Run” (2018; outlier exclusion in return calculations). https://www.gsb.stanford.edu/insights/how-ceos-waiting-buy-companies-they-want-run
10. CapitalPad, Search Funds and Investor Overview. https://capitalpad.com/search-funds/; https://capitalpad.com/invest/