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Steady private equity still a long-term performer

Australian private equity notched steady returns in the first quarter of 2013, and although the sector significantly trailed equities for the period, it continues to outperform over most longer-term horizons.

A quarterly report from the Australian Private Equity and Venture Capital Association (AVCAL) found the Cambridge Associates LLC Australia Private Equity and Venture Capital Index (the C|A Australia Index) gained 2.36 per cent in the first quarter of 2013.

Although the S&P/ASX 300 Index rose 8.04 per cent over the same period, private equity is still in front over three-, five- and 15-year horizons. The C|A Australia Index posted annualised net-of-fees returns of 7.18 per cent, 3.71 per cent and 8.99 per cent respectively over those timeframes, AVCAL stated.

However, equities outperformed private equity on a 10-year basis by 10.21 per cent to 8.37 per cent on an annualised basis.

AVCAL chief executive Katherine Woodthorpe said the first quarter of 2013 saw the highest level of distributions to limited partners in the last five quarters, and the second highest level since records began.

“Despite the challenging environment for exits, it is encouraging to note that private equity is generally delivering good returns to investors, particularly with realisations being top of mind for many limited partners at the moment,” Ms Woodthorpe said.

The managing director of Cambridge Associates’ Sydney office, Eugene Snyman, said moving forward “it will be interesting to see how the continued strength of the equities markets will impact exits, perhaps leading to even greater returns for many private equity investors”.


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Klaus Ingemann

John Beck

Sunny Bangia