State Street Corporation’s GX Private Equity Index (PEI), a benchmark for comparative analysis of private equity performance, saw an overall return of 4.2 per cent in the second quarter of the year.
The index is based on directly sourced limited partnership data and represents more than USD2.2 trillion of private equity investments, with 2,492 unique private equity partnerships, as of 30 June, 2015.
“Throughout the last three years, from October 2012 to September 2015, we have witnessed significant amounts of capital distributions with the ratio of distributions to paid-in capital reaching an historical high of 1.78x,” says Will Kinlaw (pictured), head of State Street Associates. “When we looked at the year-to-date figures in our GX PEI database, which we estimate covers approximately 60 per cent of the total asset class, we saw that as of September 30 2015, distributions had exceeded USD188 billion.”
Buyout was the best performing private equity strategy with a return of 4.67 per cent. Investors in these funds benefited from more than USD52.5 billion in capital distributions, or more than double the total capital drawdowns.
Venture Capital funds outside of the US and Europe, primarily made up of emerging market funds, had a particularly strong performance posting a return of 7.02 per cent.
European-focused private equity funds recorded a return of 7.78 per cent in the second quarter.
“European-focused private equity’s 7.78 per cent return this quarter reversed the almost 3 per cent decline from the first quarter of this year. This was partially due to the 3.7 per cent euro appreciation during the second quarter, but we also saw the ratio of distributions to paid-in capital reach 2.85x during the quarter,” adds Kinlaw.
