Australian private equity outperformed S&P/ASX 300 by 14% in Q1 2012
15 August 2012
Boston, MA, and Sydney, Australia
The Cambridge Associates LLC Australia Private Equity and Venture Capital Index (C|A Australia Index) rose by 7.80% (net of fees) in the twelve months leading to 31 March 2012, according to the latest quarterly report released by The Australian Private Equity and Venture Capital Association Ltd (AVCAL) today.
The C|A Australia Index outperformed the S&P/ASX 300 Accumulation Index (ASX 300) by 14.07% over the same period.
For the quarter ending 31 March 2012, the C|A Australia Index rose by 1.43%, marking the fifth consecutive quarter of positive returns. Nine of the last ten quarters have now had positive returns (the sole exception being Q4 2010 which saw the index fall by 0.82%). Similarly, nine of the last ten years have also recorded positive returns (the exception being the year leading to Q1 2009).
The C|A Australia Index’s medium to long term results remained steady, with annualised returns of 9.49%, 3.18% and 7.38% over the 3-, 5- and 10-year horizons respectively. In contrast, the ASX 300’s returns fluctuated between 11.35%, -2.10% and 6.93% over the corresponding horizons.
In the twelve months leading to 31 March 2012, a total of AU$2.6B was distributed back to LPs while $2.1B was drawn down. Over this period, distributions peaked in Q4 2011 before falling again due to a deceleration in exit activity in Q1 2012.
Australian Private Equity & Venture Capital Association (AVCAL) CEO Dr Katherine Woodthorpe said, “Private equity returns continue to do well and we are encouraged by the relative stability of those returns in contrast with the more volatile listed markets. The longer-term performance, in particular, provides a strong argument for why private equity should be in any well-managed institutional portfolio with a long-term timeframe.”
Eugene Snyman, Managing Director at Cambridge Associates’ office in Sydney, Australia, said: “The consistency of Australian PE performance can benefit Institutional Investors looking to address short-term public market volatility. This performance is in line with what we are seeing in developed markets around the world, and we expect Australian PE to continue attracting investor interest.”
The report is published on the AVCAL website.
The Cambridge Associates LLC indices are an end-to-end calculation based on data compiled from 54 Australia private equity and 22 Australia venture capital funds, including fully liquidated partnerships, formed between 1997 and 2012.
1 Pooled end-to-end return, net of fees, expenses, and carried interest.
Sources: Cambridge Associates LLC, Bloomberg L.P., Standard & Poor's, Thomson Reuters Datastream, UBS AG and UBS Global Asset Management.
About Cambridge Associates
Founded in 1973, Cambridge Associates is a provider of independent investment advice and research to institutional investors and private clients worldwide. Today the firm serves over 900 global investors and delivers a range of services, including investment consulting, outsourced portfolio solutions, research services and tools (Research Navigatorsm and Benchmark Calculator), and performance monitoring, across all asset classes. The firm compiles the performance results for more than 4,700 private partnerships and their more than 64,000 portfolio company investments to publish its proprietary private investments benchmarks, of which the Cambridge Associates LLC U.S. Venture Capital Index® and Cambridge Associates LLC U.S. Private Equity Index® are widely considered to be among the standard benchmark statistics for these asset classes. Cambridge Associates has more than 1,000 employees serving its client base globally and maintains offices in Arlington, VA; Boston; Dallas; Menlo Park, CA; London; Singapore; Sydney; and Beijing. For more information about Cambridge Associates, please visit www.cambridgeassociates.com.
AVCAL is the voice of private equity (PE) and venture capital (VC) in Australia. Membership includes 70 domestic and international PE and VC managers active in Australia as well as pension/super funds, service providers and other stakeholders. AVCAL is active in communicating, researching and advocating the significant contribution that PE and VC makes to the broader Australian economy. AVCAL members account for over $26bn of investments and are key providers of capital, funding innovation, productivity enhancements, entrepreneurial activity and sustainability. Australian PE and VC firms back over 500 Australian based companies.
AVCAL – Kar Mei Tang, ph +61 (0)2 8243 7000, email@example.com
Cambridge Associates - Frank Lentini, Sommerfield Communications, ph +1 212 255 8386, firstname.lastname@example.org
Author: Adrian O’Shannessy, Director, Greenwoods & Herbert Smith Freehills
Author: Dr Kar Mei Tang, Head of Policy and Research, AVCAL