A solid start for Australian private equity in 2013
13 August 2013
The first quarter of 2013 saw the Cambridge Associates LLC Australia Private Equity and Venture Capital Index (C|A Australia Index) post gains of 2.36%, according to the latest quarterly report released by The Australian Private Equity and Venture Capital Association Ltd (AVCAL) today. Over the same period, the S&P/ASX 300 Index continued to rise on the back of growing confidence in the US economy and domestic interest rate cuts, increasing by 8.04%.
The C|A Australia Index over the medium to long term outperformed listed equities, posting annualised net-of-fees returns of 7.18%, 3.71% and 8.99% over the three, five and fifteen-year horizons respectively. However, ten-year returns showed listed market returns of 10.21% outpacing an 8.37% return by private equity.
One-year returns for the C|A Australia Index were steady at 6.72% on an AUD basis and 7.42% in USD terms. For ten of the last eleven years, annual rolling returns for the Index have been positive.
Australian Private Equity & Venture Capital Association (AVCAL) CEO Dr Katherine Woodthorpe said, “It is interesting to note that the first quarter of 2013 saw the highest level of distributions to limited partners in the last five quarters, and the second highest level since records began. Despite the challenging environment for exits, it is encouraging to note that private equity is generally delivering good returns to investors, particularly with realisations being top of mind for many limited partners at the moment."
Eugene Snyman, Managing Director at Cambridge Associates’ office in Sydney, Australia, said: “Moving forward, it will be interesting to see how the continued strength of the equities markets will impact exits, perhaps leading to even greater returns for many private equity investors.”
Cambridge Associates LLC Australia/AVCAL Index Returns for the period ending 31 March 2013
|Cambridge Associates LLC Australia Private Equity & Venture Capital Index (A$)1||2.36||6.72||7.18||3.71||8.37||8.99|
|Cambridge Associates LLC Australia Private Equity & Venture Capital Index (US$)1||2.79||7.42||11.60||7.31||13.76||14.38|
|S&P/ASX 300 Index||8.04||19.15||5.04||2.92||10.21||8.57|
|S&P/ASX Small Ordinaries Index||1.61||-5.82||-0.77||-3.48||8.56||5.34|
|UBS Australia Bank Bill Index||0.72||3.58||4.44||4.71||5.32||5.30|
|UBS Australian Composite Bond Index||0.14||7.03||7.95||7.82||6.27||6.33|
The Cambridge Associates LLC indices are an end-to-end calculation based on data compiled from 61 Australia private equity and 23 Australia venture capital funds, including fully liquidated partnerships, formed between 1997 and 2013.
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 950 global investors and delivers a range of services, including investment consulting, outsourced investment solutions, research and tools (Research Navigatorsm and Benchmark Calculator), and performance monitoring, across asset classes. The firm compiles the performance results for over 5,300 private partnerships and their more than 67,000 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 1,100 employees serving its client base globally and maintains offices in Arlington, VA; Boston; Dallas; Menlo Park, CA; London; Singapore; Sydney; and Beijing. Cambridge Associates consists of five global investment consulting affiliates that are all under common ownership and control. For more information about Cambridge Associates, please visit www.cambridgeassociates.com.
The Australian Private Equity & Venture Capital Association Limited (AVCAL) is a national association which represents the private equity and venture capital industries. AVCAL's members comprise most of the active private equity and venture capital firms in Australia. These firms provide capital for early stage companies, later stage expansion capital, and capital for management buyouts of established companies.
AVCAL – Dr Kar Mei Tang, ph +61 (0)2 8243 7000, firstname.lastname@example.org.
Cambridge Associates – Frank Lentini, Sommerfield Communications, ph +1 212 255 8386, email@example.com.
Author: Kosta Sinelnikov, Senior Research Analyst, AVCAL