Happy Thursday and welcome to another edition of Beyond TVPI.

My fellow Danish LP, Peter Juhl Nielsen, recently questioned what some performance rankings actually measure. In diligence, he wants to see whether a PE firm sells a company that is "fundamentally different from what they bought."

I like that test. It also made me think about last week's piece on screening track records. I argued that an LP should be able to compare the managers it has met across vintages, IRR, TVPI and DPI. I still believe that.

But that’s only a starting point. The further I get into a manager, the smaller a role those numbers play.

In Founders’ Corner, I write about one of the best problems to have.

Enjoy the read,

Steffen

Rankings and benchmarks help an LP decide where to spend scarce time. The risk is carrying that lens into diligence and starting with a presumption that a top-quartile manager must have a good process.

I have written before about why a ranking should lead to questions rather than shorten the diligence. Peter's point gets at what those questions should uncover.

As a rule of thumb, once I am going into diligence, I am no longer diligencing headline fund returns. They matter, but they are a known quantity.

Instead, I want to understand what happened inside the GP and in the companies that produced those returns.

Take a business from acquisition to exit. What did it sell, to whom, and in which markets when the GP bought it? What did those answers look like when it was sold? Did the company add a product, build a sales organisation, improve pricing, integrate acquisitions, or become less dependent on a few customers?

And I want to see those patterns across companies.

A value-creation bridge helps. How much of the return came from revenue and earnings growth? How much came from acquisitions, debt paydown or a higher exit multiple? Did the growth come from the original business or from assets bought along the way?

The bottom line is I want the GP's explanation of the company to agree with the numbers.

A company that changed substantially doesn’t prove the GP built it. Management may have driven the change, or the market may have been kind. Buying well is a skill, but it is a different claim from building the business.

One of the tightest decisions I made as an LP turned on that difference.

We had known the manager for years, and I flew down for the on-site leaning towards a no. Nothing was wrong, but nothing stood out. The "why this manager" wasn't there. The first hours of a six-hour session didn’t move me.

Then we went through the portfolio company by company, mostly unglamorous businesses like pavement services. Who proposed the plan, who made the hires, what happened when something failed. The detailed answers made it clear the GP's own team was deeply involved.

Nothing clicked in a single moment. It was the accumulation. Back in Copenhagen, after much deliberation, we recommended a yes. We didn’t expect outlier returns; everything we knew said this manager wouldn’t produce them. But we were confident it would be a very good steward of our capital, deep in the work of improving its companies.

A very different answer can earn the same credit. A GP that says “management was great, so our main job was to guide when needed and otherwise stay out of the way” earns a lot of trust from me. It is being honest about attribution, which is exactly what I’m testing for.

This is where the rest of diligence comes back in. Which partners led the work in those companies, and are they still doing it? Has the GP moved into larger deals or new sectors? Does the operating team have the capacity to repeat what the case studies describe across the current portfolio?

A track record can belong to a different strategy from the fund being raised today. Strong company building in a smaller, older fund does not automatically travel with a larger cheque and a changed team. Deal attribution and style drift matter because they tell you how much of the old evidence applies to the next commitment.

None of this makes performance disposable. Past performance is very important, and it is an early gate.

But the decision I described above had little to do with quartiles, and as diligence progresses, the ranking takes up less space in my decision. By the time I reach an investment committee, I want to be able to describe the companies the GP bought, the changes made during ownership, the people responsible, and why I think that work can be repeated.

A top-quartile label cannot answer any of those questions.

Screening has drawn more interest than anything we’ve launched.

Some clients have used it so heavily that they’ve gone deep into their AI extraction budget. That’s the best signal a founder can get: people aren’t just trying the tool, they’re running their pipeline through it.

It’s also why I’m glad we built token limits from day one. Nobody in this industry likes a surprise capital call, and nobody should get a surprise software bill either. The limits protect our clients from spend that suddenly jumps, and they protect us as a company while usage grows faster than we planned for.

This newsletter is written by Steffen Risager, the founder of FundFrame, a platform for LPs to manage their private markets investments.

Before that, Steffen was CIO at Advantage Investment Partners, a Danish Fund-of-Funds.

Steffen has a decade of experience as an LP, and has made commitments totalling approx. $6bn across fund- and co-investments.