Australian private equity continues to deliver stable, solid returns in periods of high volatility for public equities, according to the Cambridge Associates LLC Australia Private Equity and Venture Capital Index (CA Australia Index).
The CA Australia Index, which measures private equity and venture capital returns in Australia, outperformed the S&P/ASX 300 Index over all time horizons for up to 10 years, according to the latest quarterly report released today.
For the quarter ended 30 September 2011, the CA Australia Index had annualised returns of 4.79%, 3.63%, 3.92% and 7.41% over one, three, five and ten years respectively. This compares very positively with the public equities indices, which recorded negative annualised returns over all corresponding periods, with the sole exception of the 10-year horizon.
Australian Private Equity & Venture Capital Association (AVCAL) CEO, Dr Katherine Woodthorpe (pictured), says: "The consistent outperformance of Australian private equity funds when compared to public equities indices is particularly noteworthy given that post-GFC, the total returns for private equity and venture capital investments have not exhibited the same kind of volatility and downside seen in the public equity markets.
"These results demonstrate a major benefit of private equity as an asset class to institutional investors — helping their wider portfolio returns weather short-term public market volatility, while at the same time targeting superior long-term returns."
Eugene Snyman, Managing Director at Cambridge Associates’ office in Sydney, Australia, says: "The consistent nature of Australian PE returns is indeed noteworthy and similar to what we have evidenced in other developed PE markets around the world."
This is the sixth 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.
