European Private Equity returns positive across all time horizons, driven by buyout fund returns; Long-term returns outperform public market indices.
For the period ending December 31, 2013, European private equity performance showed positive returns across all investment horizons. One year returns, which are most affected by the current market environment, moved in a positive direction from June 2013, registering a 3.8 percentage point increase to 11.80%.
Buyout funds saw positive returns across all investment horizons, with strong double-digit returns in the 1, 10 and 20-year time horizons. Medium buyout funds in the 20-year time horizon performed best, with returns of 23.25%. Venture Capital fund returns also held positive, with the shorter 1 and 3-year time horizons performing best. One year returns moved in a positive direction from June 2013, registering a 0.2 percentage point increase for venture capital funds (2.45%) and a 4.2 percentage point increase for buyout funds (13.04%).
While both the FTSE 100 and the Stoxx 600 outperformed the “all private equity” returns in the 1, 3 and 5-year time horizons, private equity showed better returns, compared to the public markets, in the longer-term time horizons.
The Private Equity Performance Index is based on the latest quarterly statistics from Thomson Reuters' private Equity Performance Database analysing the cash flows and returns for over 1,579 European venture capital and private equity partnerships with a capitalisation of over US$500 billion.