State Street Corporation’s GX Private Equity Index(PEI), a benchmark for comparative analysis of private equity performance, saw an overall return of -1.37 per cent in Q3 2015, it’s first fall in three years.
“The third quarter marks an abrupt end to an uninterrupted, 12-quarter streak of positive returns, the longest winning streak in the 20-year history of our Index,” says Will Kinlaw, senior vice president of State Street Global Exchange. “With growing uncertainty about the global economy and a big spike in public capital market volatility over the past six months, it’s no surprise that the private equity market is taking a pause.”
The Index is based on directly sourced limited partnership data and represents more than $2.3 trillion in private equity investments, with 2,462 unique private equity partnerships, as of September 30, 2015.
“There has been a spike in exit activity over the past several years, with private equity managers returning capital to investors faster than they are calling it,” says Kinlaw. “This has been the trend for 16 quarters, and while it did not reverse in Q3, it has slowed sharply. Managers are being a lot more selective.”