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French private equity returns 11.3 per cent net per year over 10 years

The performance of French private equity since inception, measured at the end of 2014, totalled an average 10.1 per cent IRR net of charges per year, up from 9.5 per cent at end 2013 on a like-for-like basis.

Over a 10-year horizon the average IRR increases to 11.3 per cent net (compared with 10.9 per cent like-for-like at end 2013).

That’s according to the latest annual report by the French private equity and venture association, AFIC (Association Française des Investisseurs pour la Croissance) and EY.

These figures reflect the robust long-term profitability of this asset class and the stable performance.

The average annual return of 11.3 per cent is twice as high as for listed equity markets (4.8 per cent for the CAC 40 , 5.8 per cent for the CAC All-Tradable – formerly SBF 250, based on the PME method). The results are the same compared with the bond and real estate markets which recorded growth of respectively 5.4 per cent and 6.4 per cent.

Over a ten-year period, the average annual return of venture capital has grown significantly, from 0.8 per cent at end 2013 to 2.1 per cent at end 2014, and reaching 4.4 per cent over a 3-year horizon.
Over 10 years, the performance of buy out capital and growth capital is up from the previous year, at 15.6 per cent and 6.5 per cent respectively compared with 15.2 per cent and 6 per cent on a like-for-like basis at end 2013.

Hervé Jauffret, Partner at EY, says: "2014 confirmed the robust performance observed at end 2013 with French private equity 10-year performance fixed above 10 per cent over the past few years". 

Philippe Blanadet, Partner at EY, states: "While performance varies across private equity sectors, venture capital saw impressive growth in 2014 with 3-year performance at 4.4 per cent.”

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