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US PE and VC funds outperformed public markets in Q1, says Cambridge Associates

This year began on a positive note for investors in US private equity and venture capital funds, with both asset classes earning positive returns for the three-month period ending 31 March 2014. 

While venture capital outperformed private equity for the second quarter in a row, both asset classes easily bested the public markets, according to Cambridge Associates LLC benchmark indexes. 
 
Q1 marked the seventh and tenth consecutive quarter of positive returns, respectively, for the private equity and venture capital benchmarks.
 
The Cambridge Associates LLC US Private Equity Index rose 3.1 per cent in the first quarter versus the S&P 500, which increased 1.8 per cent. This suggests that private equity is back on track to outperform the public markets versus the one, three, and five-year time periods, where PE has had difficulty keeping pace with strong public equity markets. 
 
Over ten years, the index's annualised return was 14.0 per cent, which was significantly better than the S&P 500's 7.4 per cent and higher than all public equity benchmarks. 
 
The Cambridge Associates LLC US Venture Capital Index returned 4.9 per cent for the quarter, beating all public equity benchmarks for the period. The venture index did the same for the one-year and ten-year marks, returning 30.5 per cent and (an annualised) 10.0 per cent, respectively.

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