Performance of Listed Private Equity

by Etienne Paresys

  • 30 Oct 2009
  • PE

The listed private equity industry provides an alternative to traditional private equity funds, allowing any potential investors to gain exposure to the industry. Preqin analyses performance metrics for approximately 100 listed private equity vehicles.

Net asset value (NAV) for listed private equity vehicles are strongly correlated to that of traditional private equity funds, registering very little change in Q4 2007, Q1 2008 and Q2 2008. In Q3 2008, listed private equity companies devalued their average NAV by 6.3%; however the most significant change was in December 2008, when the industry complied with fair market valuation techniques and the NAVPS dropped by 17%. To date, there are no NAVPS figures available for September 2009, as most companies have not released their Q3 financial reports. The quarterly changes in share prices reflect the trends seen in the NAV but their variations are much more extreme. December 2008 was also the lowest point for investors, with a decline of 39.6% in the share price and a further decline of 14.0% in the first quarter of 2009. During Q2 and Q3 2009, the share prices increased very rapidly, by 29.2% in June and 25.4% in September 2009.

Listed private equity share prices should give good indications of future trends in private equity performance. December 2008 shows a steep drop in the share price average and this trend continues until Q1 2009, which marks the lowest point for all the fund types. However, since March 2009 the industry has shown signs of recovery, with share prices steadily increasing, a trend which should be reflected in the unlisted private equity industry.

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