Deal Attribution
Deal attribution explains what drove returns—entry pricing, leverage, operational improvements, multiple expansion, and timing.
Definition
Definition Attribution breaks down performance into drivers. In private equity, common attribution components include EBITDA growth (operational improvement), multiple expansion/contraction (market regime), leverage effects, and cash generation. In venture, attribution may include ownership, follow-on decisions, pricing discipline, and exit timing. Attribution helps distinguish skill from market tailwinds. Allocator Context Allocators use attribution to test repeatability. High returns without clear attribution often get discounted as cycle-driven. Institutions prefer managers who can explain outcomes honestly, including deals that went wrong and what changed. Decision Authority Attribution is often used in IC memos and re-up decisions. If returns appear dependent on multiple expansion rather than value creation or underwriting discipline, committees may reduce confidence in forward returns. Why It Matters for Fundraising Good attribution makes fundraising easier because it gives LPs a clean internal narrative: why the manager wins, and why it’s likely to persist. Weak attribution forces LPs to assume the returns were luck or market beta. Key Takeaways Separates skill from market effects Drives allocator confidence in repeatability Important for re-ups and scaling decisions Honest treatment of losses increases credibility