When comparing the Q4 2010 returns of private equity with the listed markets (S&P 500, MSCI Europe and MSCI Emerging Markets), over the one-year period private equity returns generated an annualized return of 18.8% as of 31st December 2010, 0.8% for the three-year time frame and 11.0% over five-year horizon.
All the returns across the one-year period for the public indices are in the black, with MSCI Emerging Markets returning 18.9% as of 31st December 2010, S&P 15.1% and MSCI Europe 3.9%. Returns are noticeably lower over the three-year time horizon across all the public indexes, with MSCI Europe reporting a return of -8.9%. The MSCI Emerging Markets index is higher than the other public indices for the five-year horizon returning 12.8%, 2.9% for the MSCI Europe and 2.3% for the S&P 500.
It should be noted that investors investing in the private equity class remain committed for a long period of time whereas the public markets are more liquid. Therefore any comparison made should be viewed with this in mind.