Private Equity Continues to Outperform S&P 500

Private Equity Continues to Outperform S&P 500

The Private Equity Growth Capital Council has released a new analysis of returns provided by private equity investments compared to the S&P 500. Based on the analysis of private equity benchmarks, private equity outperformed (net of fees) the S&P 500 for 1, 5 and 10-year time horizons by 1.8, 3.7 and 7.0 percentage points, respectively. A link to a free copy of the 24 page PEGCC report is available at the end of this article.

“The data released today highlights the consistent outperformance of private equity compared to public markets,” said PEGCC President & CEO, Steve Judge. “The benefits of private equity returns to the pensions, charitable foundations and university endowments are clear. No other asset class provides the consistently superior returns of private equity, helping to secure the retirements of millions of teachers, firefighters and police.”

Private equity investments delivered similar returns (net of fees) to public pensions. PEGCC analysis of recently published data from eight pension funds shows median private equity returns exceeded the S&P 500 for 5 and 10-year time horizons by 4.2, and 7.0 percentage points.

“This analysis shows that, on a ten-year basis, private equity returns are nearly triple the gains of the S&P 500. Providing superior investment performance over long time horizons is a hallmark of private equity, and it is unmatched by any other asset class,” said Bronwyn Bailey, PEGCC Vice President of Research.

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 March 31, 2012, the most current data available. All returns are calculated net of fees.

The private equity industry in the U.S. comprises nearly 2,600 investment firms. They operate nearly 15,300 U.S.-based businesses in all 50 states and all Congressional districts. These companies employ approximately 8.1 million people. In 2011 alone, U.S. private equity firms invested nearly $144 billion in over 1,700 U.S.-based companies. The private equity industry has distributed over $1 trillion to its limited partner investors over the past three decades.

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, D.C. (

For a free copy of the 24 page report click HERE.

© 2012 PEPD • Private Equity’s Leading News Magazine • 10-18-12

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