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State Street’s GX Private Equity Index sees 350 basis points year-to-year increase in PE returns

The State Street Global Exchange Private Equity Index (GXPEI) ended 2016 with a moderate quarterly performance, posting an overall gain of 2.58  per cent in the fourth quarter, a slight decrease from the 3.8  per cent return in Q3 2016. Buyout funds posted a strong annual return of 12.52  per cent but Venture Capital continued to face headwinds.

Based on directly sourced limited partnership data, the PEI represents more than USD2.5 trillion in private equity investments and over 2,600 unique private equity partnerships, as of 31 December, 2016.
“Public markets continue to show signs of strength with valuations at healthy levels,” says Will Kinlaw (pictured), senior managing director and global head of State Street Associates, a division of State Street Global Exchange. “In private markets, we saw heightened exit activity in recent years as managers took the opportunity to exit their investments. Recently, however, capital calls have slowed. The evidence suggests that general partners are taking a careful approach in identifying opportunities that provide superior returns at decent valuations.”
“We have seen solid fund raising activity across all private equity sub-classes recently,” says Anthony Catino, managing director, Alternative Investment Solutions for State Street. “With large distributions in the past few years driving dry powder to historical levels, investors are eager to put their money back to work and maintain the level of private equity in their overall asset allocation.”

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