Private Equity Horizon IRRs by Fund Type as of Q3 2009

by Etienne Paresys

  • 05 Mar 2010
  • PE

The overall private equity horizon IRR for the one-year period to September 30th, 2009 stands at -9.2%, comparing favourably to the -24.1% posted as of June 30th, 2009. Private equity returns improved between June and September 2009, but all private equity strategies are still posting negative one-year horizon returns for the period ending in Q3 2009. With a horizon IRR of -17.1%, mezzanine is the worst performer over the period. Fund of funds is the second-worst performing strategy, with a horizon IRR of -12.0%. The buyout sector is posting a one-year return of -11.2%, still deeply negative but already picking up from the -28.0% posted in Q2 2009.

Three-year horizon IRRs are all in positive territory, varying from 1.0% for fund of funds to 6.5% for mezzanine. Longer-term returns are still strong, with private equity posting 20.0% over a five-year period to September 30th, 2009. Buyouts are posting the strongest returns over the five-year period, with a horizon IRR of 25.4%.

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