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Performance of All Private Equity

Examining the median ratios of called-up to committed capital, distributed to paid-in capital and remaining value to paid-in capital for the private equity industry provides a key indication of the performance on the industry as a whole.

Preqin’s data show that investors investing in the median funds of vintages between 1990 and 1994 received distributions of around 200%, meaning that they have, in some cases, doubled their money. Vintages 1995, 1996 and 1997 show returns around 1.5x mark. Return for 1998 vintage funds are lower, affected as they were by the technology bubble burst, with investors expecting a return of around 1.2x from the median fund. More recent vintages have lower distributions thus far, but they have a higher proportion of remaining value in their portfolios. For example, median vintage 2002 funds have distributed 1.05x paid-in capital and still have 62% of paid-in capital in value remaining in their portfolio. This means that investors can expect a return of nearly 1.7x their original commitments. Recent vintages show low or no distributions, but these funds are in the early stages of their investment cycles. For example, the median vintage 2006 fund has called over 60% of its capital, returned 2% back to investors and its portfolio is worth 73%. It must be emphasized that because these funds are in the early stages of their investment cycles, fund managers have not had enough time to add value to their investments.

For more information on the performance of all types of private equity fund, please click here.

Posted by Bronwyn Williams on 05-Feb-2010

Keywords: private equity, private equity performance, private equity fund performance, dpi, private equity distributions