Proprietary Deals Are a Myth: Build Proprietary Systems
If you think the next billion-dollar return is hiding in someone’s “exclusive deal flow”, you’ve already lost.
The Mirage of Proprietary Deal Flow
In private equity, “proprietary” has become the industry’s most abused word. Every fund claims it. Few can prove it. And fewer still admit the inconvenient truth: proprietary deals don’t outperform for long.
The data is clear. Proprietary deal flow is wanted, but rare in practice. For instance, Bain’s 2025 Global Private Equity Report shows that corporate carve-out deals are earning only ~1.5× MOIC on average since 2012, just slightly below the broad buyout average [1]. Meanwhile, deal sponsors regularly report that a large portion of their “proprietary” deals still involve intermediaries: in a survey by PrivateEquityCareer.com, firms said 39% of their closed deals came from proprietary sources, but the rest came via limited or broad auctions, i.e. with banker or broker involvement [2].
Why Proprietary Systems Outlast Proprietary Deals
The real edge isn’t in finding a deal no one else can see. It’s in building a machine that keeps producing quality deal flow regardless of market cycle, banker rolodex, or founder golf buddy. Proprietary systems are repeatable sourcing engines that blend data, process discipline, and relationship density, creating structural advantage. Unlike one-off deal luck, systems compound.
Ask yourself: if your top sourcing VP quit tomorrow, would your deal pipeline collapse? If the answer is yes, you don’t have an edge; you have a personality cult. At Caprae, we build operating systems that survive individual exits. That’s how you outlast luck.
The Story of Vista Equity Partners
Vista is among the most disciplined investors in software. Its edge is infrastructure, not access. Vista built a proprietary database tracking tens of thousands of software companies, layered with operating benchmarks and deployed through a 100-plus-point playbook [3].
The result? Vista has consistently delivered net IRRs in the mid-20s%, far above industry averages, across multiple vintages [4]. Their best deals weren’t “exclusive”; they were inevitable outcomes of a sourcing system designed to never miss patterns. When the industry talks about Vista’s dominance, it’s not charisma or luck. It’s systems discipline.
The Unfiltered Reality
The graveyard is full of funds that bragged about their proprietary edge, only to find themselves empty-handed when intermediaries stopped calling. Systems, not slogans, are what keep funds alive through cycles.
Caprae exists to tell you the thing no one else will: proprietary deals don’t last. Proprietary systems do. And only firms with the operational DNA to build those systems will still be standing when the next cycle clears the room.
Footnotes:
Schooley, G., Siegal, B., von Eckartsberg, C., & Dingemann, L. (2025, March 3). PE-Backed Carve-Outs Used to Be Reliable Winners. So What Happened? Bain & Company.
Sutton Place Strategies. (2021, December 9). Proprietary Deals: Sponsors Say They Close Plenty. Marketing & Communications, SPS by Bain & Co.
Gara, A. (2019, July 11). Robert Smith, Brian Sheth on how Vista Equity continues to dominate software buyouts. Forbes.
Fortune. (2024, February 28). The Private Equity Class of 2021 Shows Tech Investors … Thoma Bravo Was the Top PE Acquirer of Tech Companies in 2021.