The State Street Private Equity Index rose by 5.94 per cent during the quarter ended 31 December 2009, a slight increase from the third quarter return and 2,226 basis points higher than the return recorded in the fourth quarter of 2008.
“Over the course of 2009, we witnessed fewer deals and a drop in fund raising activity in the Private Equity industry,” says Bill Pryor, senior vice president of State Street Investment Analytics. “However, private equity has since made a major comeback in the second half of 2009, finishing the year with all major fund categories posting positive returns over one-, three-, and five-year time horizons.”
From 2008 to 2009, all private equity sectors posted a 15.0 per cent one-year end-to-end return, after five consecutive quarters of negative returns. Mezzanine and distressed debt funds recorded a 35.3 per cent return for the one-year investment time period.
The since inception internal rate of return as of the fourth quarter of 2009 was 11.42 per cent, an increase of 139 basis points from the prior quarter.
The European and the Rest of World regions were 14.91 per cent and 5.09 per cent, respectively, with the latter showing an increase of more than 250 basis points from the prior quarter.
The index is based on the latest quarterly statistics from State Street Investment Analytics’ Private Edge Group and includes 1,717 private equity partnerships with a total fund size of USD1.6trn.
