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Aussie private equity investors are laughing all the way to the bank!


If the latest quarterly report recently released by The Australian Private Equity and Venture Capital Association Ltd (AVCAL) is anything to go by, then Australian private equity investors definitely have something to smile about.

Why? Well, the Cambridge Associates LLC Australia Private Equity and Venture Capital Index aka the C|A Australia Index has posted gains of 2.36 per cent in the first quarter of 2013.

And on top of that, the numbers also indicate that even in the medium to long term, private investors can still expect to rake in more bucks than their mates over at the listed equities.

The C|A Australia Index has posted annualised net-of-fees returns of 7.18 per cent, 3.71 per cent and 8.99 per cent over the three, five and fifteen-year horizons respectively.

One-year returns were steady too at 6.72 per cent on an AUD basis and 7.42 per cent in USD terms. It is also worth noting that for ten of the last eleven years, annual rolling returns for the Index have been positive. Impressive huh?

However, things are not rosy everywhere for the private investors. When it comes to ten-year returns, the listed market posted returns of 10.21 per cent outpacing an 8.37 per cent return for private equity.

AVCAL’s CEO Dr Katherine Woodthorpe commented, “It is interesting to note that the first quarter of 2013 saw the highest level of distributions to limited partners in the last five quarters, and the second highest level since records began.”

“Despite the challenging environment for exits, it is encouraging to note that private equity is generally delivering good returns to investors, particularly with realisations being top of mind for many limited partners at the moment,” Dr Woodthorpe added.

Eugene Snyman, Managing Director at Cambridge Associates’ office in Sydney, Australia, said, “Moving forward, it will be interesting to see how the continued strength of the equities markets will impact exits, perhaps leading to even greater returns for many private equity investors.”