index

PE Outperforms Listed Markets following Crisis: Preqin

by

June 7, 2012

Preqin has published a study that shows that its private equity index is outperforming the S&P 500 Index.  The PreqIn Index currently shows that all private equity strategies, with the exception of venture capital, have outperformed the S&P 500 since 31st December 2000.

 

However, there is significant variation in the performance of the best and worst private equity fund managers. This, coupled with more than 1,830 funds currently seeking investor commitments, means that the vital fund selection decisions investors need to make are more challenging than ever. The figure above compares various Preqin indices.

Key Findings.

• The PrEQIn All Private Equity Index (rebased to 100 as of 31st December 2000) stands at 198.5 as of Q3 2011, while the S&P 500 stands at 105.1 as of Q3.

 

• The Index demonstrates that manager selection is very important for investors; The PrEQIn Top Quartile Index shows large quarterly increases up until the financial crisis, and begins to move up again during 2009, continuing its steep increase to 509.5 as of Q3 2011.

 

• The Bottom Quartile Index, meanwhile, peaked at 80.7 in Q4 2007 before enduring quarterly decreases as a result of the crisis, and has remained relatively flat since, standing at 49.1 as of Q3 2011.

 

• Distressed private equity funds have performed the best out of all private equity strategies, and the PrEQIn Distressed Private Equity Index stands at 322.1 as of September 2011.

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