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PrEQIn - Private Equity Quarterly Index: Fund Quartile - November 2013

by Claire McNeil

  • 12 Nov 2013
  • PE

The PrEQIn Private Equity Quarterly Index by fund quartile demonstrates the performance of top performing managers compared with their lower quartile peers. Fund manager selection is an important consideration for LPs and this analysis highlights the difference in returns generated by the best and worst performers in the industry. Preqin assigns quartile rankings to funds based on their net IRR and multiple figures compared to counterparts in terms of strategy, vintage and geographic focus. The Index is rebased to 100 as of 31st December 2000.

The difference between the fourth quartile and the top quartile has widened since the rebase date of December 2000 to Q1 2013 and has seen only six quarters in which the difference has decreased from the previous quarter. Between Q3 2008, Q4 2009 and Q1 2009 the difference narrowed, though it was still vast (313.8, 280.7 and 275.8 points respectively). The largest decrease in difference occurred from Q3 2008 to Q4 2008, when top quartile funds dropped from 380.3 to 333.3 points, while bottom quartile funds dropped from 66.6 to 52.6 points, reducing the gap by 33 points.

The gap has widened in every quarter successive to Q2 2009, from Q3 2009 to date, with the exception of Q3 2011, when the gap decreased slightly from 456 to 451.3 points. The difference between top and bottom quartiles stands at 599 points as of Q1 2013, the figure for the top quartile standing at 650.5 and the bottom at 51.5, all quartile indexes have seen non-negative changes since the beginning of 2012, apart from the fourth quartile, which decreased once, in June 2012.

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