March 14, 2013

Private Equity Continues Strong Outperformance

Bailey: “Private equity performance continues to strengthen the retirement security of millions of Americans by providing pension funds five percentage points more in returns annually over the last 10 years.”

Washington, D.C., March 14, 2013 – Private equity continues to deliver superior returns to its investors, according to the most recent quarterly performance analysis by the Private Equity Growth Capital Council. Private equity returns (net of fees) outperformed the S&P 500 (including dividends) for 3-year, 5-year and 10-year horizons ending September 30, 2012 by 2.5, 5.5 and 5.7 percentage points respectively. Private equity underperformed the S&P 500 during the 1-year horizon due to the sharp recovery of domestic equity markets during this time.

“Private equity investment provides benefits to businesses and communities in every state,” said Steve Judge, president and CEO of the Private Equity Growth Capital Council. “This research demonstrates the superior returns private equity delivers to its investors. Those who put money in private equity ten years ago beat the S&P 500 by 5.7 percentage points.”

Pension funds saw particularly impressive gains from private equity investment. The PEGCC research analyzed returns from 12 of the country’s largest public pension funds with available financials and found that median private equity returns (net of fees) outperformed the S&P 500 on 3-year, 5-year and 10-year horizons by 1.2, 3.6 and 5.0 percentage points, respectively.

“Private equity performance continues to strengthen the retirement security of millions of Americans by providing pension funds five percentage points more in returns annually over the last 10 years,” said Bronwyn Bailey, PEGCC vice president of research. “These investments mean stronger, more reliable retirement funds for firefighters, teachers and police officers across America.”

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About the Private Equity Performance Update

PEGCC calculates the excess returns from private equity by comparing the median values from third party data providers to the S&P 500 Total Return index.  The research was compiled using data as of September 30, 2012, the most current data available.  All returns are calculated net of fees.