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Private Equity J-Curves

by Bronwyn Williams

  • 15 Jul 2011
  • PE

The J-curves of private equity funds have began to resemble W-curves since the onset of the financial crisis and the subsequent recovery in the private equity industry.

Vintage 2005 funds represent some of the most affected funds by the downturn - returns for this vintage peaked at 9.9% in Q4 2007, before decreasing and moving into the red for a few quarters before recovering back into the black. Returns for vintage 2008 funds moved into the black towards the mid-way of the second year of their fund life and are currently showing a return of 6.3%. It must be emphasized that due to the long term nature of private equity investments, the returns for these vintages still have time to improve.

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