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The PrEQIn All Private Equity Quarterly Index vs. S&P 500

by Gary Broughton

  • 30 Mar 2012
  • PE

For many investors, constructing an effective private equity investment program within their wider investment portfolio is an important way to spread risk and to take advantage of the potentially higher returns traditionally associated with the private equity asset class. The new PrEQIn Quarterly Index allows for a comparison between the returns of the private equity asset class against those from other asset classes.

By plotting the PrEQIn All Private Equity Index against the quarterly S&P 500 index, rebased to 100 as of 31st December 2007, we can gain an insight into how the private equity industry has performed compared to the listed markets, both during and after the financial crisis of 2008 and 2009. The analysis shows that both the PrEQIn All Private Equity and the S&P 500 indices reached their lowest points in Q1 2009, with the S&P 500 showing a greater initial decline at the start of the financial crisis. Despite this initial impact, however, both indices recovered to similar levels by Q1 2010. Since this time, the PrEQIn All Private Equity index has continued to recover at a steady rate whereas the S&P 500 index is more volatile, declining further between Q1 2010 and Q2 2010 before recovering again.

In the most recent quarters, both indices have shown quarterly declines, potentially due to the European sovereign debt crisis. For full information on how you can gain free access to the PrEQin Quarterly Index and other benchmarks, please click here.

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