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Private Equity Performance: Median Net IRRs by Fund Type

by Etienne Paresys

  • 26 Mar 2010
  • PE

Preqin analyzed the benchmark median net IRRs as of 30 September 2009 for the main private equity strategies for vintages 1995 to 2008. The outcome of this analysis illustrates that most types of fund have performed well historically, but that the returns of recent vintages have been particularly affected by the financial crisis. With a 32.6% median IRR, venture funds of vintage 1997 generated the best median return for the period observed. The second and third best median returns have been produced by funds with a 2001 vintage: vintage 2001 real estate funds have generated 28.8%, while vintage 2001 buyout funds have a median IRR of 24.2%. Venture funds with this vintage are in the red, however, due to the technology crash. The returns for 2006 vintage funds and onwards are closely grouped together, particularly for the most recent vintages. These vintage years are showing the effects of the credit crisis, with all median IRRs in negative territory. It must be emphasized that these funds are still relatively early in their fund lives and their performance could improve over time as underlying investments mature and are realized.

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