State Street Corporation’s GX Private Equity Index, a benchmark for comparative analysis of private equity performance, which includes a comprehensive data set dating back to 1980saw an overall return of 1.11 per cent in the last quarter of 2015.
“Private equity funds posted a modest recovery in the fourth quarter after a brief drop in the previous quarter,” says Will Kinlaw, senior managing director and global head of State Street Associates, part of State Street Global Exchange. “Overall we have seen relatively steady performance in private equity investments for the past few years. The biggest driver in the fourth quarter rebound was the continued trend of impressive growth by venture capital funds, which haven’t posted a negative return since 2012.”
The Index is based on directly sourced limited partnership data and represents more than USD2 trillion in private equity investments, with more than 2,500 unique private equity partnerships, as of March 31, 2016.
“Private equity returns for 2015 posted a 6.55 per cent return in the US, compared to negative returns of both the S&P 500 and Russell 3000,” says Kinlaw.
“The plunging price in energy and commodities continued to have a significant impact on the performance of private equity, and specifically buyout funds in 2015,” says Anthony Catino, managing director of State Street’s alternative investment solutions business. “However, we have also seen signs that some private equity firms are looking for opportunities to pick up assets and entire companies, with the hope to take advantage of cheap valuation.”