Australian private equity returned 7.85% in 2011
31 May 2012
Boston, MA, and Sydney, Australia
The Cambridge Associates LLC Australia Private Equity and Venture Capital Index (CA Australia Index) rose by 7.85% in 2011, significantly outperforming the S&P/ASX 300 Accumulation Index which fell by 10.98% over the same period. This translated to an outperformance of 18.83% - net of fees - for the 2011 calendar year.
The CA Australia Index outperformed the S&P/ASX 300 Accumulation Index over nearly all time horizons for up to 10 years, according to the latest quarterly report released by the Australian Private Equity and Venture Capital Association Ltd (AVCAL) today.
As of 31 December 2011, the CA Australia Index had annualised returns of 7.85%, 7.11%, 3.29% and 7.52% over one, three, five and ten years respectively. This relatively stable pattern of returns contrasted sharply with that of the S&P/ASX 300 Accumulation Index, which fluctuated between annualised returns of -10.98%, 7.67%, -2.39% and 6.14% over the same horizons.
Pooled returns from most investment vintage years have performed very well to date. And despite the lacklustre performance of public equities in the last two years, companies receiving their initial injections of private equity and venture capital investment in 2010 and 2011 have performed well by comparison, recording pooled returns of 14.26% and -3.43% respectively as of the end of 2011.
Australian Private Equity & Venture Capital Association (AVCAL) CEO Dr Katherine Woodthorpe said: “The collective performance of our members has been simply outstanding, even despite the effects of the global financial crisis over the preceding years. It simply further demonstrates the value of investing in private equity and venture capital. This asset class generates the kind of long-term returns that investors – whether they are superannuation funds, sovereign wealth funds or other wealth management funds -- are crying out for today.”
Eugene Snyman, Managing Director at Cambridge Associates’ office in Sydney, Australia, said: “This consistently strong performance bodes well for fundraising and investment activity through the remainder of the year and into 2013.”
This is the seventh 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 31 December 2011
The Cambridge Associates LLC Australia Private Equity & Venture Capital index is an end-to-end calculation based on data compiled from 51 Australia private equity and 20 Australia venture capital funds, including fully liquidated partnerships, formed between 1997 and 2011.
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 Navigatorâ� 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 back over 500 Australian-based companies. www.avcal.com.au www.twitter.com/avcal1 www.linkedin.com/in/avcal
• AVCAL – 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