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All three categories of private equity see continued uptick in returns

The State Street Global Exchange Private Equity Index (GXPEI) ended the fourth quarter of 2017 with a continued strong performance by way of a 4.78 per cent total gain. Buyout Funds lead private equity strategies in gains with 5.23 per cent for the quarter.

The PEI is based on directly-sourced limited partnership data and represents more than USD2.7 trillion in private equity investments, with more than 2,800 unique private equity partnerships, as of December 31 2017.
 
Buyout funds have now led in gains among the three main private equity strategies (Buyout, Venture Capital and Private Debt) for eight consecutive quarters.
 
Venture Capital returns improved to 4.21 per cent from 3.57 per cent in Q3 while Private Debt funds inched higher to 3.15 per cent in returns, up from 2.84 per cent in Q3.
 
Q4 2017 saw continued, yet slowing, depreciation of USD against the Euro of 1.6 per cent, following a Q3 decline of 3.5 per cent and Q2 decline of 6.2 per cent.
 
European-focused private equity funds experienced a 5.42 per cent quarterly gain in USD-denominated terms (3.78 per cent in EUR-denominated IRR); US-focused funds returned 4.30 per cent; and funds focused on the rest of the world gained 6.14 per cent.
 
Among sectors, Industrial funds once again saw the highest return, rising to 6.68 per cent from 5.87 per cent in Q3, followed by Information Technology funds with a return of 5.91 per cent, up from 3.80 per cent in Q3; Energy funds’ performance continued to improve with a return of 4.05 per cent, up from 2.59 per cent in Q3.
 
Average monthly paid-in-capital to commitment (PICC) increased to 0.77 per cent in 2017 up from 0.64 per cent in 2016; Average monthly distribution to commitment (DCC) increased to 1.07 per cent in 2017 up from 0.88 per cent in 2016.

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