ith the release of private equity performance data as of Q4 2009, Preqin analyzed how private equity fund valuations improved over the period December 31st 2008 to December 31st 2009. Looking at the weighted data, which takes into account fund size, the all private equity performance showed an increase of 13.5% in NAV over the course of the year. This compares very favourably to the 15.8% decrease recorded in 2008. There was a wide range of changes to NAV between the different fund strategies. Buyout funds saw the largest improvement, with net asset values increasing by 15.5%. Mezzanine posted an increase of 8.4%, followed by venture capital with 4.0%. Fund of funds shows a marginal decrease in its weighted change but a small increase in its non-weighted figure.
With the exception of fund of funds, all fund types show better results when the changes in value are weighted with fund sizes. The all private equity non-weighted average increase drops to 7.0% compared to 13.5% when the data is weighted. This indicates that larger funds have seen their valuations improving more than smaller funds. It should however not be forgotten that larger funds were also the most affected when private equity valuations were severely marked down in the second half of 2008.
For more information about private equity performance, please see Preqin’s Performance Analyst.