Preqin’s Performance Analyst module holds private equity performance data for over 5,800 funds and using this data we can calculate the annual change in net asset value (NAV) for the main private equity strategies – buyout, venture, fund of funds and real estate.
The non-weighted metric for the whole private equity industry to September 2011, which does not take into account differing fund sizes, shows an annual increase in NAV of 9.7%. Over the same period the non-weighted valuations for fund of funds increased by 9.5%, buyout and venture funds both increased by 9.3%, and 8.6% for real estate funds.
Examining the average annual change in NAV by the different buyout sizes shows that large buyout funds yield the highest increase of 11.5%. Small buyout fund valuations, meanwhile, increased by 10.8%, mega buyouts 9.2% and mid-market buyouts increased by 7.0%. It is important to bear in mind that the large buyout vehicles typically use more leverage in their investments, so the larger vehicles were affected more significantly by the financial crisis than the smaller buyout vehicles. As a result the larger funds have had more ground to make up since then.