Preqin’s Performance Analyst module currently has performance data for over 6,000 private equity funds, which can be used to analyse the average quarterly change in net asset value (NAV) over 2011. During the first quarter of 2011 fund valuations increased the most, with an average increase of 4.8% in the non-weighted metric and increase of 5.2% in the weighted metric. The weighted metric takes into account the fund size and allows the larger funds to have more of an impact. In contrast, Q3 2011 private equity valuations decreased by 5.1% in the weighted metric and by 2.8% in the non-weighted metric.
In the final quarter of 2011, the average non-weighted change in NAV for the whole private equity industry increased by 2.2%, and saw a weighted increase of 2.0%. The lower weighted increase over this quarter suggests that the larger vehicles were still recovering from the drop in valuations in Q3 2011.
Over Q4 2011, the average weighted change in fund valuations varied among the different private equity investment strategies: buyout funds reported an increase of 1.8%, fund of funds increased by 0.2%, real estate 1.6% and venture capital by 1.3%. It is important to note that the performance data for fund of funds generally lags by a quarter because of the reporting schedules of the underlying funds.