Australian private equity continues to outperform public markets - AVCAL

The Cambridge Associates LLC Australia Private Equity and Venture Capital Index (CA Australia Index), which measures private equity and venture capital returns in Australia, has outperformed local stock market index the S&P/ASX 300, over several different time periods.

A report produced by Cambridge Associates found that the average IRR for private equity stood at of 8.59%, 2.42%, 4.23% and 7.81% over one, three, five and ten years respectively for the quarter ended 30th June.

Katherine Woodthorpe, CEO of AVCAL, commented: "The increased number of exits this year has seen many investments delivering excellent returns to the pension funds and other institutional funds who are the primary investors in this asset class."

The average quarterly return for PE was 3.18%, compared to -4.26% for the S&P/ASX 300 Index. The S&P/ASX Small Ordinaries Index, which represents the small cap members of the S&P/ASX 300 Index, and the UBS Australian Composite Bond Index, the benchmark for Australia's bond indices, generated respective returns of 2.3% and -9.31%.

In June, AVCAL also released a study that found private equity-backed IPOs perform better than those without PE involvement. An analysis of all offerings valued $100 million or above over a seven-year period found that those supported by private equity outperformed the field at all points up to three years after listing. Average returns ranged from 4% to 78% for PE-backed IPOs compared to -2% to 4% for non-PE backed IPOs.

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• Topics
• Australasia
• Performance
• Exits
• AVCAL
• Australia