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Australian PE and VC continue to outperform public equities

Continuing the trend seen over the last three quarters, the Cambridge Associates LLC Australia Private Equity and Venture Capital Index outperformed the S&P/ASX 300 Index over the one-, three- and five-year horizons as of the quarter ended 31 March, 2011, with annualised returns of 7.7%, 1.5% and 4.8% respectively.

Thanks to the strength of the Australian dollar, the Australian benchmarks are even more impressive in US dollar terms, with one-, three- and five-year annualised returns of 21.3%, 7.5% and 13.0% respectively.

Post-crisis investments in particular have continued to perform strongly. Funds from the 2008 vintage year, as well as Australian investments made in 2009 and 2010, are now registering double-digit IRRs.

"Based upon our analysis we estimate the Australian Private Equity and Venture Capital Index now represents approximately 70% of the dollars raised by institutional-quality Private Equity and Venture Capital firms in Australia, adding credence to the accuracy of the performance data," says Eugene Snyman, Managing Director at Cambridge Associates’ office in Sydney, Australia.

The Australian Private Equity and Venture Capital Association (AVCAL) CEO Dr. Katherine Woodthorpe (pictured), says: "Private equity and venture capital are not only a high-performing asset class over medium- to longer-term time horizons, but are less volatile than many may think, as the latest index figures attest."

This is the fourth quarterly report from the Index, which is a result of a strategic partnership between AVCAL and Cambridge Associates, global provider of independent research and investment consulting services.

The response rate from Australian private equity and venture capital managers providing their financial fund data to the benchmark continues to grow, as reflected by the 14% increase in the number of funds in the benchmark from the prior quarter, bringing the total number of funds reporting their data to 66.

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