Australian PE and VC deliver stable, solid returns
15 November 2011
Boston, MA, and Sydney, Australia
The Cambridge Associates LLC Australia Private Equity and Venture Capital Index (CA Australia Index) continues to outperform the S&P/ASX 300 Index over multiple time horizons.
The CA Australia Index, which measures private equity and venture capital returns in Australia, also outperforms other key asset benchmarks over a number of different time periods.
For the quarter ended 30 June 2011, the CA Australia Index had annualised returns of 8.59%, 2.42%, 4.23% and 7.81% over one, three, five and 10 years respectively.
The index’s quarterly return of 3.18% also compares favourably against minus 4.26% for the S&P/ASX 300 Index, 2.3% for the S&P/ASX Small Ordinaries Index and minus 9.31% for the UBS Australian Composite Bond Index.
The Australian industry benchmark is even more impressive in US dollar terms, with one-, three- and five-year annualized returns of 37.63%, 8.33% and 12.66% respectively.
Australian Private Equity & Venture Capital Association (AVCAL) CEO Dr Katherine Woodthorpe said: “The index demonstrates that private equity is overall delivering substantial – and importantly, consistent – net returns to investors over multiple time horizons. The increased number of exits this year has also seen many of these investments delivering excellent returns to the pension funds and other institutional funds who are the primary investors in this asset class.”
“We have been very pleased with the response from the Australian private equity and venture capital fund manager community. Since we began releasing the benchmark five quarters ago, the number of participating funds has increased by more than 60 percent,” said Eugene Snyman, Managing Director at Cambridge Associates’ office in Sydney, Australia.
This is the fifth quarterly report from the Index, which is a result of a strategic partnership between AVCAL and Cambridge Associates, global provider of independent research and investment consulting services.
Cambridge Associates LLC Australia/AVCAL Index Returns for the period ending June 30 2011
|Cambridge Associates LLC Australia Private Equity & Venture Capital Index (A$) 1||3.18||8.59||2.42||4.23||7.81|
|Cambridge Associates LLC Australia Private Equity & Venture Capital Index (US$) 1||6.78||37.63||8.33||12.66||16.25|
|S&P/ASX 300 Index||(4.26)||11.90||0.26||2.37||7.22|
|S&P/ASX Small Ordinaries Index||2.33||5.55||8.05||6.50||6.18|
|UBS Australia Bank Bill Index||1.23||4.98||4.78||5.62||5.44|
|UBS Australian Composite Bond Index||(9.31)||16.41||(2.59)||1.21||8.18|
The Cambridge Associates LLC Australia Private Equity & Venture Capital index is an end-to-end calculation based on data compiled from 52 Australia private equity and 18 Australia venture capital funds, including fully liquidated partnerships, formed between 1997 and 2010.
1Pooled end-to-end return, net of fees, expenses, and carried interest.
Sources: Bloomberg L.P., Cambridge Associates LLC, Standard & Poor's, Thomson 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 representing nearly $3 trillion in aggregate assets. Cambridge Associates delivers a range of services, including investment consulting, outsourced portfolio solutions, research services and tools (Research Navigatorâï¿½ and Benchmark Calculator), and performance monitoring, across all asset classes. The firm compiles the performance results for more than 4,500 private partnerships and their more than 62,000 portfolio company investments to publish its proprietary private investments benchmarks, of which the Cambridge Associates U.S. Venture Capital Index® and Cambridge Associates U.S. Private Equity Index® are widely considered to be the industry-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. www.cambridgeassociates.com
AVCAL, the Australian Private Equity and Venture Capital Association Limited, was established in 1992 as a forum and voice for participants in the private equity and venture capital industry. Membership includes almost all the domestic and international PE and VC fund managers active in Australia. PE and VC are key sources of capital for companies of all sizes, to enable their growth and realise their potential. VC is one of the few sources of capital available to enable entrepreneurs to convert innovative ideas into sustainable enterprises. Australian PE has around $23.6b under management while VC has around $2.9b under management. www.avcal.com.au www.twitter.com/avcal1www.linkedin.com/in/avcal
Author: Adrian O’Shannessy, Director, Greenwoods & Herbert Smith Freehills
Author: Dr Kar Mei Tang, Head of Policy and Research, AVCAL