Strong exit environments in both Europe and Asia helped private equity and venture capital funds in emerging markets and developed markets outside the US outperform public markets in those regions in 2015, according to global investment adviser Cambridge Associates.
Emerging market PE and VC returns beat non-US developed market PE and VC returns, in part because of a weakening euro, which brought down non-US developed market returns when measured in US dollars.
The Cambridge Associates Global ex US Developed Markets Private Equity and Venture Capital Index returned 2.0 per cent in USD terms in Q4, bringing the return for the year to 5.7 per cent, a slight improvement over 2014. For comparison, the MSCI EAFE returned 4.7 per cent for the quarter but fell 0.8 per cent for the year.
The Cambridge Associates Emerging Markets Private Equity and Venture Capital Index increased 5.1 per cent for the quarter and 8.5 per cent for the year, a drop of almost 6 percentage points from its double-digit 2014 year-end result. For comparison, the MSCI Emerging Markets index rose 0.7 per cent for the quarter but dropped over 14 per cent for the year.
Cambridge Associates derives its non-US developed and emerging markets PE/VC indexes from data compiled from institutional quality funds raised between 1986 and 2015. There are almost 800 funds in the developed markets index, with a value of about USD253 billion, and more than 560 in the emerging markets index, with a value of roughly USD158 billion.
The CA global ex US developed markets index includes private equity and venture capital funds that invest primarily in Australia, Canada, Israel, Japan, New Zealand, Singapore, and developed markets in Western Europe. The CA emerging markets index includes private equity and venture capital funds that invest primarily in Africa, emerging Asia, emerging Europe, Latin America and Caribbean, and the Middle East ex Israel.
