The Cambridge Associates Australia Private Equity and Venture Capital Index rose by 7.80 per cent (net of fees) in the 12 months to 31 March 2012, according to the latest quarterly report released by The Australian Private Equity and Venture Capital Association.
The C|A Australia Index outperformed the S&P/ASX 300 Accumulation Index by 14.07 per cent over the same period.
For the quarter ending 31 March 2012, the C|A Australia Index rose by 1.43 per cent, marking the fifth consecutive quarter of positive returns. Nine of the last ten quarters have now had positive returns, the sole exception being Q4 2010 which saw the index fall by 0.82 per cent. Similarly, nine of the last ten years have also recorded positive returns, the exception being the year leading to Q1 2009.
The C|A Australia Index’s medium to long term results remained steady, with annualised returns of 9.49 per cent, 3.18 per cent and 7.38 per cent over the three, five and 10 year horizons respectively. In contrast, the ASX 300’s returns fluctuated between 11.35 per cent, -2.10 per cent and 6.93 per cent over the corresponding horizons.
In the 12 months leading to 31 March 2012, a total of AUD2.6bn was distributed back to LPs while AUD2.1bn was drawn down. Over this period, distributions peaked in Q4 2011 before falling again due to a deceleration in exit activity in Q1 2012.
Katherine Woodthorpe, chief executive of the Australian Private Equity & Venture Capital Association, says: “Private equity returns continue to do well and we are encouraged by the relative stability of those returns in contrast with the more volatile listed markets. The longer-term performance, in particular, provides a strong argument for why private equity should be in any well-managed institutional portfolio with a long-term timeframe.”
Eugene Snyman, managing director at Cambridge Associates’ office in Sydney, Australia, says: “The consistency of Australian PE performance can benefit institutional investors looking to address short-term public market volatility. This performance is in line with what we are seeing in developed markets around the world, and we expect Australian PE to continue attracting investor interest.”
