Australian private equity posts steady gains in 2012
23 May 2013
The Cambridge Associates LLC Australia Private Equity and Venture Capital Index (C|A Australia Index) showed steady gains in 2012, increasing by 5.78%, 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 surged by 19.74%, due in part to multiple domestic interest rate cuts and strong global stock market performance.
Notwithstanding the sharp rise in the listed index over the preceding 12 months, the C|A Australia Index continued to beat listed equities over three and five-year horizons, with returns of 6.88% and 2.83%, compared to returns of 2.8% and -1.81% for the S&P/ASX 300, respectively.
Over a 15-year time period, the C|A Australia Index delivered an 8.73% return on an AUD basis and a 14.26% return on a USD basis.
The C|A Australia Index returned 1.56% for the quarter ending 31 December 2012. This continues the trend of positive performance by the index, where returns for 10 of the last 12 quarters since January 2010 have been positive.
Australian Private Equity & Venture Capital Association (AVCAL) CEO Dr Katherine Woodthorpe said, “The availability of 15-year data for Australian private equity and venture capital returns provides us with a better understanding of how these industries truly perform. The index has again outpaced listed market returns in the long-term, even despite the surge in public equities in the past year. This highlights the consistent returns, underpinned by long-term growth, that differentiate these investments from other asset classes.”
“Australian private equity and venture capital have fared well in 2012, despite mid-year challenges,” said Eugene Snyman, Managing Director at Cambridge Associates’ office in Sydney, Australia. “2012’s positive ending caps off another year of strong performance overall. Looking forward, it will be interesting to see whether public markets will bolster private investment performance in 2013.”
Cambridge Associates LLC Australia/AVCAL Index Returns for the period ending 31 December 2012
|Cambridge Associates LLC Australia Private Equity & Venture Capital Index (A$)1||1.56||5.78||6.88||2.83||8.02||8.73|
|Cambridge Associates LLC Australia Private Equity & Venture Capital Index (US$)1||1.39||6.98||11.91||6.98||13.69||14.26|
|S&P/ASX 300 Index||6.77||19.74||2.80||-1.81||9.05||8.39|
|S&P/ASX Small Ordinaries Index||2.04||6.58||-1.81||-6.94||8.19||5.54|
|UBS Australia Bank Bill Index||0.86||3.98||4.54||4.93||5.37||5.34|
|UBS Australian Composite Bond Index||0.23||7.72||8.35||8.26||6.35||6.51|
The Cambridge Associates LLC indices are an end-to-end calculation based on data compiled from 63 Australia private equity and 23 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 950 global investors and delivers a range of services, including investment consulting, outsourced investment solutions, research and tools (Research Navigator and Benchmark Calculator), and performance monitoring, across asset classes. The firm compiles the performance results for over 5,000 private partnerships and their more than 65,000 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, 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