The State Street Global Exchange Private Equity Index (GXPEI) posted its second highest quarterly return of the past two years at 3.99 per cent in the second quarter of 2018.
The venture capital category held its lead for the second quarter in a row with a 4.64 per cent gain, followed closely by buyout funds with a 4.18 per cent return; but private debt lagged behind with a 1.90 per cent return for the quarter.
The PEI is based on directly-sourced limited partnership data and represents more than USD2.8 trillion in private equity investments, with more than 2,900 unique private equity partnerships, as of 30 June, 2018.
“Overall the second quarter of 2018 has seen a good recovery from the volatile first quarter. However, the growth is not universal across the index,” says Will Kinlaw, global head of State Street Associates, a division of State Street Global Exchange. “In particular, information technology and energy sectors stand out from the crowd, largely benefiting the venture capitalist and energy-focused funds. Although private debt funds show a below average return this quarter, their fund raising activity has been particularly strong in 2018. To date, they have raised almost the same amount of capital in the first two quarters of this year as they did in all of 2017.”
“The US dollar appreciated against major currencies, including the euro in the second quarter, partially due to rising interest rates and good economic data,” says Anthony Catino, managing director, Alternative Investment Solutions for State Street. “This contributed to a lower US dollar denominated return than euro denominated return for the Europe focused funds. Time will tell the overall impact of the dollar’s stability on FX returns as we head towards the end of 2018.”