Tuesday, February 19, 2013

U.S. Private Equity Beats Venture Capital For Quarter Ending September 30, 2012

Performance for both U.S. private equity and venture capital funds was positive in the third quarter of 2012 but private equity managers fared much better, as indicated by the Cambridge Associates LLC benchmark indices of the two alternative asset classes. The private investment indices underperformed public equities in the third quarter as public markets rebounded from a negative second quarter.

Over the long term, private equity and venture capital have handily beaten the public markets.

The third quarter returns for the Cambridge Associates LLC U.S. Private Equity Index® and the Cambridge Associates LLC U.S. Venture Capital Index® were better than those posted in the second quarter. Of the two benchmarks, the private equity index showed more improvement. A similar trend was seen in the public equity indices but not in the IPO market, which cooled in the third quarter. The Cambridge Associates LLC U.S. Private Equity Index® is derived from performance data compiled for funds that represent the majority of the institutional capital raised by private equity partnerships between 1986 and 2012. Based on that data, private equity’s returns versus indices tracking large- and small-capitalization public equities – the Dow Jones Industrial Average, the Russell 2000 Composite, and the S&P 500 – are shown here.

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