Happy Thursday and welcome. As always, let's dive in.

As GPs routinely double in fund size, the track record LPs rely on is increasingly built in a different fund than the one being offered.

This piece uses four signals - sector expansion, EV size drift, entry multiples relative to market, and leverage trends - to diagnose how much a strategy has already moved.

The backward audit has a forward implication: if the direction of travel is away from the original strategy, the next fund continues that journey. Which means the question of repeatability becomes harder to answer.

So let’s get to it.

Many years ago, I passed on Veritas Capital Fund VI. It turned out to be one of the best-performing buyout funds of its vintage - tracking north of 30% net IRR and close to 3x TVPI.

I wrote about that decision before. The short version: the fund was 3–4x larger than the vehicles that built the track record. The last meaningful realisations came from deals that looked nothing like what they were now underwriting. We were being asked to buy a history that had been built in a different company. At least, that was our analysis.

LP diligence is backward-looking by design. But what matters here is the trajectory.

I'd make the same call today. But that experience also sharpened how I think about a problem that's becoming more common, not less.

Successful GPs routinely double in fund size. Sometimes more. A team that built their reputation in a €500m fund raises a €1bn fund, then a €2bn fund, then a €4bn fund. The track record compounds beautifully in the presentation.

What the deck doesn't show you is how much of that track record was built in a fund that bears almost no resemblance to what they're investing in today.

This is strategy drift. And understanding it is a triangulation exercise.

LPs talk about repeatability constantly. It's the essence of diligence: can this team do it again?

But the question assumes the strategy is stable. That the GP deploying Fund VII is running the same playbook they ran in Fund III.

They often aren't.

Or to use a simple analogy: Scoring 30 points a game during March Madness, doesn’t translate into a succesful NBA career.

Fund size grows. Team grows. Check sizes grow. The GP that used to buy €50m EBITDA businesses is now writing checks into €200m EBITDA businesses. The GP that historically paid 8x is now paying 14x. The GP that built their returns in one sector has added two adjacent ones.

The analysis below is backward-looking by design. It measures how much the strategy has already moved - from the realizations that built the track record to the deals being underwritten today. But the backward reading has a forward implication: if the direction of travel is away from the original strategy, the next fund continues that journey. You're not just inheriting the drift that's already happened. You're buying into the trajectory.

And in the most extreme cases - a 4bn fund whose last realizations came from a 1bn fund - the gap between what you evaluated and what you bought can be very wide.

There's no single indicator for strategy drift (related to fund size growth). It's a picture assembled from multiple angles. This is not exhaustive, just a few angles.

Sidenote: Typically, this can't be done before getting access to the VDR and Appendix F from the ILPA template (or similar).

That’s a different exercise from assessing whether the new strategy will work.

Underwriting the forward-looking strategy - larger deals, higher multiples, new sectors - is its own analysis. Different reference points, different pattern recognition, different risks.

The purpose here is more basic: to understand whether you’re actually underwriting the same strategy that produced the track record, or something else entirely.

1. Sectors

Is the GP investing in the same sectors, or expanding into new ones?

Some adjacency is natural. But a manufacturing-focused industrials investor that adds industrial focused tech and services is a slightly different product, even if the “Industrials” tag remains.

The tell is usually in recent deal activity rather than the deck. GPs rarely announce strategy expansion. They describe individual investments as exciting opportunities that fit their model. Aggregated across two or three funds, the picture becomes clear.

2. Company EV size

This is the most direct signal and the easiest to track.

A mid-market GP is defined by the companies they buy. If the median EV at entry has moved materially - Fund III deals at €100–200m, Fund VII deals at €400-700m - the competitive landscape is different, the operational model is different, the reference points for value creation are different.

I look at median entry EV across all deals and track the direction. That line tells you more about the strategy evolvement than the positioning document.

3. Entry multiples - relative to market

This is where I've seen the most consistent drift, which often raises red flags.

Many GPs built their track records as disciplined buyers - strong sourcing, proprietary deal flow, a genuine edge on entry price. It showed in the numbers.

Some of those same GPs are now paying at or above market. The sourcing narrative is unchanged. The discipline story is unchanged. The multiples have moved.

The important distinction is not whether multiples have increased - they've increased everywhere. The question is whether the GP has moved relative to the market. A GP that historically paid 8x when the market was at 10x, and now pays 12x in a market at 11x, has undergone a fundamental shift in how they think about entry. That's not market adjustment. That's a different strategy - and a clear red flag in my book.

I've seen a number of GPs make exactly this transition - in consumer, in industrials, in healthcare. The deck still says "disciplined buyer." The deal sheet tells a different story.

4. Composition of returns

This is the closest you get to bridging the old strategy and the new one - without stepping into forward-looking underwriting.

If a meaningful portion of historical returns has been generated from larger deals - often through co-investments alongside the main fund - that tells you the GP has at least operated in that segment before.

If, on the other hand, the track record is almost entirely driven by smaller deals, the move upmarket is a clearer break from what has actually been proven.

The signals summed up

This doesn’t tell you whether the new strategy will work. But it does tell you how much of it has already been done.

I also want to add, that none of this is conceptually difficult. Everybody investing in a private fund can calculate an EV/EBITDA ratio.

What makes it hard is doing it systematically - across multiple funds, with comparable data, and through the same lens, without rebuilding the analysis from scratch each time.

The dynamics that create strategy drift are accelerating.

Successful GPs face structural pressure to grow. LPs with significant AUM need larger checks. Fund economics improve at scale. The brand compounds. Investors line up. What was a €1bn fund becomes €2bn becomes €4bn - sometimes across five years.

The LP/GP perception gap on this is striking. In the screenshot above, fellow Danish LP, Peter Juhl Nielsen noted that LPs give placement agents a dead-faced look when they describe a 50% fund size increase as modest. And yet at a recent gathering of GPs, many in the room seemed to believe scale was itself a mark of quality - something to lead with rather than explain. Both positions are rational given their respective incentives.

The result is that the GP impressing LPs at €1bn is increasingly likely to be deploying out of a €3-4bn fund by the time they've demonstrated a full cycle of returns. The track record you’re evaluating is built in a smaller fund and a different market.

This doesn't make the investment wrong. There are GPs who have scaled without losing the edge - just look at Veritas. But that's a specific, non-trivial thing to underwrite.

The question I'd want answered before any commitment: what percentage of the historical realizations came from companies that actually resemble what this GP is investing in today? Not only by sector label - by size, by complexity, by entry multiple, by how the value was created.

If the answer is less than half, the repeatability question has already changed shape. You're no longer asking whether they can do it again. You're asking whether they can build a new track record - at a larger scale, in a different competitive tier, with a playbook that's only two or three funds old at this size.

That's a legitimate bet - and one I’ve made many times. But it's a different forward-looking analysis.

You’re not just underwriting repeatability. You’re underwriting the ability to keep creating value in a tangential part of the market.

One thing I keep coming back to is how much of building a company is really just the repeated act of prioritizing.

Not once. Not at the annual planning session. Not when you set the roadmap. But every week, and usually every day.

We are at a stage where talking to current and potential customers is incredibly valuable. Almost every conversation gives us something useful - a sharper articulation of a pain point, a better understanding of how teams actually work, or a reminder that what seems obvious to us is often not obvious in the market.

At the same time, those conversations create tension. Because every good conversation opens another door. And once you see all the things worth building, it is hard to unsee.

That is the eternal struggle: almost everything feels important, and quite a lot of it actually is.

The hard part is not generating ideas. The hard part is accepting that a lot of good things must wait so the few most important things can move faster.

Building well seems to require a kind of discipline that is slightly uncomfortable: staying excited about the broader roadmap while still being ruthless about what matters now.

That is what we are trying to do. Listen closely. Stay ambitious. Keep the roadmap up to date. But remain disciplined enough to say: not yet.

Easier said than done.