Emerging markets fail to meet LP expectations – research

Based on analysis conducted by Pervara - which is owned by alternative investments software provider eFront - of called and distributed capital by more than 2,300 private equity funds, pooled returns exceeded a 16% IRR on only one occasion during the nine-year period, while the top 5% of performers bettered the target in six out of nine years.

Pervara's threshold was based on research indicating that 57% of LPs expect an average return of 16% from emerging markets. In developed markets, the target return is 12%. The top 5% of funds have consistently bettered this mark, while top quartile funds met or exceeded expectations in four out of nine years between 2000 and 2011. Pooled returns managed it once.

Analysis of more recent data shows an improvement in private equity returns with $254 billion distributed in 2013, compared to $192.9 billion and $176.1 billion on 2012 and 2011, respectively. Capital calls have fallen over the same period, dropping to $101.8 billion last year from $145.4 billion in 2012. The average IRR for 2013 was 17.27%, up from 12.11% in 2012 and 7.68% in 2011.

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• Topics
• Performance
• LPs
• GPs
• Asia
• Performance
• LPs
• GPs