The State Street Private Equity Index posted a 0.65 per cent return for the quarter ended 30 June 2010, 157 basis points lower than the first quarter of 2010 return and 483 basis points lower than the return recorded during the same period a year ago.
The second quarter of 2010 return for the European and rest of world regions were -3.14 per cent and 0.48 per cent, respectively, with both reflecting a significant decrease from prior quarter.
For the time period from third quarter 2009 to second quarter 2010, all private equity recorded a 19.2 per cent one-year end-to-end return and mezzanine and distressed debt funds combined recorded a 27.9 per cent return for the same one-year investment time period, continuing to perform better than other investment strategies.
“We have now seen five consecutive quarters of positive returns for private equity with low volatility relative to the public equity markets,” says Bill Pryor, senior vice president of State Street Investment Analytics. “In the first half of 2010, deal flow picked up significantly and drove down accumulated outstanding commitments by about ten per cent from its peak in the fourth quarter of 2009.”
The since inception internal rate of return as of 30 June 2010 was 11.0 per cent, a slight decrease from the prior quarter. Buyout funds and venture capital recorded 11.4 per cent and 8.7 per cent, respectively. distressed debt and mezzanine funds posted an 11.2 per cent return since inception and exceed the all private equity since inception return for the second consecutive quarter.
