Private Equity Performance Still Languishing - Preqin Data

Tom Burroughes Editor London 22 March 2010

Private Equity Performance Still Languishing - Preqin Data

Recent data shows that private equity fund investors made no positive returns in the 12 months to 30 September last year, according to analysis of returns by Preqin, the research firm covering the sector. In the 12-month period, there was a negative rate of return of -9.2 per cent.

Internal rates of return take account of the complex timing of private equity deals, infusions of fresh investor funds and distributions of profits to investors. As such, these returns are not directly comparable to returns from listed equities, for example.

The Preqin report, issued last week, said that the one-year IRRs compared with -6.9 per cent loss for the S&P 500 over the same period to 30 September 2009, and a return of 19 per cent for the MSCI Emerging Markets Index of equities.

However, the negative figure for IRRs is an improvement on the -24.1 per cent figure for one-year returns to 30 June 2009, the report said.

Preqin’s figures were based on more than 4,900 private equity funds, which in aggregate value, account for about 65 per cent of all capital ever raised. About 70 per cent of the funds analysed for this report were based in the US, Preqin told WealthBriefing.

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