Australian private equity returns continue to outperform
8 February 2012
Boston, MA, and Sydney, Australia
The Cambridge Associates LLC Australia Private Equity and Venture Capital Index (CA Australia Index) demonstrates that private equity continues to deliver stable, solid returns in periods of high volatility for public equities.
The CA Australia Index, which measures private equity and venture capital returns in Australia, outperformed the S&P/ASX 300 Index over all time horizons for up to 10 years, according to the latest quarterly report released today.
For the quarter ended 30 September 2011, the CA Australia Index had annualised returns of 4.79%, 3.63%, 3.92% and 7.41% over one, three, five and ten years respectively. This compares very positively with the public equities indices, which recorded negative annualised returns over all corresponding periods, with the sole exception of the 10-year horizon.
Australian Private Equity & Venture Capital Association (AVCAL) CEO Dr Katherine Woodthorpe said: “The consistent outperformance of Australian private equity funds when compared to public equities indices is particularly noteworthy given that post-GFC, the total returns for private equity and venture capital investments have not exhibited the same kind of volatility and downside seen in the public equity markets.
“These results demonstrate a major benefit of private equity as an asset class to institutional investors – helping their wider portfolio returns weather short-term public market volatility, while at the same time targeting superior long-term returns.”
Eugene Snyman, Managing Director at Cambridge Associates’ office in Sydney, Australia, said: “The consistent nature of Australian PE returns is indeed noteworthy and similar to what we have evidenced in other developed PE markets around the world.”
This is the sixth 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 30 September 2011
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 19 Australia venture capital funds, including fully liquidated partnerships, formed between 1997 and 2010.
1 Pooled 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 Navigator 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 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 operate over 500 Australian-based companies. www.avcal.com.au www.twitter.com/avcal1 www.linkedin.com/in/avcal
- AVCAL - Stuart Snell ph +61 (0)2 8243 7001, (0)416 650 906, 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