The Private Equity Growth Capital Council (PEGCC) has released its most recent quarterly Performance Update Report which shows that over a 10-year horizon, returns from private equity funds (net of fees) outperformed the S&P 500 (including dividends) by 5.9 percent.
“The value of private equity – especially in terms of investment returns – is how strong and consistent it performs over the long term,” said PEGCC President and CEO Steve Judge. “This performance update is the latest reminder that private equity continues to be the top performing asset class, net of fees, for public pensions, charitable foundations, and other investors.”
The PEGCC’s measure for private equity fund performance is based on the median of publicly available benchmarks. This median measure indicates that private equity funds returned an annualized 14 percent, 16.8 percent, 17 percent, and 18.1 percent during 10-year, 5-year, 3-year and 1-year periods, respectively.
According to Bronwyn Bailey, Vice President of Research for the PEGCC, private equity will more consistently outperform public markets as the financial crisis moves further into the past. “Private equity returns are less volatile than public equity, and the year-to-year analysis in this Performance Update shows that private equity is the consistent, long-term winner for investors,” said Ms. Bailey.
The PEGCC calculates the excess returns from private equity by comparing the median values from third party data providers to the S&P 500 Total Return Index. The research was compiled using data as of September 30, 2014, the most current data available. All returns are calculated net of fees.
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. Founded in 2007 and formerly known as the Private Equity Council, the PEGCC is based in Washington, DC (www.pegcc.org).
© 2015 PEPD • Private Equity’s Leading News Magazine • 3-25-15