Private equity returns significantly outperformed the S&P 500 in the most recent analysis from the Private Equity Growth Capital Council’s Performance Update. Private equity returns (net of fees) outperformed the S&P 500 (including dividends) over the 3-year, 5-year and 10-year horizons as of December 31, 2012 by 4.3%, 5.1% and 7.0%, respectively. Private equity performance is based on the Cambridge Associates US Private Equity Index, which indicated private equity IRR returns of 15.2%, 6.7% and 14.1% during the respective periods.
“Our most recent Performance Update demonstrates that private equity continues to provide strong and reliable returns to our investors – pension funds, university endowments and charitable foundations,” said PEGCC President and CEO Steve Judge. “With private equity investing $347 billion in more than 2,000 US-based companies last year, these investments strengthen companies and lead to economic growth.”
The PEGCC Performance Update’s analysis of pension funds’ private equity performance also revealed impressive returns. Median private equity returns earned by the public pension funds (net of fees) studied outperformed the S&P 500 over the 3-year, 5-year and 10-year horizons by 3.0%, 3.0% and 5.9%, respectively. A recent PEGCC whitepaper analyzing public pension investments found that private equity is the only asset class that has produced annualized 10-year returns over the average pension target return of 8 percent.
“The long-term trend shows that private equity investments yield higher returns for public pension funds than other asset classes,” said Bronwyn Bailey, PEGCC vice president of research. “These returns are invaluable to pension recipients and translate into stronger retirement security for police officers, fire fighters, public school teachers and more.”
The Private Equity Growth Capital Council is an advocacy, communications and research organization, and resource center established to develop, analyze and distribute information about the private equity and growth capital investment industry and its contributions to the national and global economy. Established in 2007, the PEGCC is based in Washington, DC (www.pegcc.org).
Click HERE for a free copy of the 29-page Private Equity Growth Capital Council’s quarterly performance analysis.
© 2013 PEPD • Private Equity’s Leading News Magazine • 7-19-13