Search Fund Returns: The 2026 Stanford Study
Why It Matters
Every two years, Stanford Graduate School of Business publishes the most complete accounting of how the traditional search fund model has actually performed. The 2026 edition is the largest yet, and its headline numbers are why capital keeps backing searchers. They describe the raised-capital path rather than a self-funded one, but the economics of buying a durable small business are the same story either way. Read them with the distribution in mind, not just the average.
The Numbers
862
Core funds tracked since 1984, roughly 99% of all known US and Canada search funds
33.9%
Aggregate pre-tax IRR across every fund in the study
4.75x
Aggregate pre-tax return on invested capital (ROI)
39.3% / 5.98x
IRR and ROI for funds that acquired a company and exited it
~48%
Share of 2021 to 2024 funds that acquired a company, down from the 58% all-time rate
~2.88x
What search funds returned versus the S&P 500 over the same holding periods (public-market equivalent)
The Power Law
The averages are real, but a handful of outliers drive them, and the honest read is in the distribution. Remove the funds that returned 10x or more and the aggregate drops from 4.75x to about 2.8x ROI, and from 33.9% to roughly 27% IRR. Strip out just the top 10% of funds by return and it falls further, to about 2.1x and 20%. A typical fund is a good outcome; a spectacular one is what moves the aggregate. Size your own expectations against the median, and treat the headline multiple as the ceiling a few reach, not the base case.
Method & Source
Figures are from the 2026 Stanford Search Fund Study: Selected Observations, Stanford Graduate School of Business, tracking 862 core funds launched since 1984. Returns are pre-tax and aggregate across funds; individual outcomes vary widely, as the distribution above shows. Whether the model fits you is a separate question from what it has returned; the Path Quiz and Investor Match speak to that.