Private Equity Returns Again Outpace Stock Market

Private Equity Continues To Deliver Strong Returns To Pension Funds And Other Investors

WASHINGTON, D.C. – The American Investment Council (AIC) released its latest Performance Update Report, which showed private equity continued to outperform major stock market indices, providing investors and pensioners with superior medium- to long-term, risk-adjusted returns during the second quarter of 2016.

“Pension funds across the U.S. require solid returns to keep their guarantees to America’s public servants,” said AIC President and CEO, Mike Sommers. “Private equity has proven its value once again by outpacing public equities and demonstrating the industry’s consistent ability to deliver for retirees and other investors.”

According to the report, annualized private equity investments over 3-, 5-, and 10-year horizons all provided investors with double-digit returns. Private equity outperformed the Russell 3000 index over the 1-, 3-, and 10-year horizons, and matched the index on a 5-year basis. The industry also exceeded returns for the S&P 500 index over the 3- and 10- year horizons—surpassing S&P 500 returns by 3.3 percent over the 10-year horizon.

Private equity produced equally impressive results for public pension funds, with returns outpacing S&P 500 returns for three out of the four time horizons. Most notably, pension fund private equity investments returned 5.9 percent on a 1-year basis, more than double the percent for the Russell 3000 Index and 1.9 percent higher than the S&P 500.

“This report shows a continuation of impressive quarter-over-quarter performance, and I expect this trend to continue into next year,” said Bronwyn Bailey, AIC’s Vice President of Research and Investor Relations. “Our industry’s strong performance is a result of our unique alignment of interests among investors, fund managers, and portfolio companies, which drives maximum returns.”

Read the full report here.

About the American Investment Council

The American Investment Council (AIC) is an advocacy and resource organization established to develop and provide information about the private investment industry and its contributions to the long-term growth of the U.S. economy and retirement security of American workers. Member firms of the AIC consist of the country’s leading private equity and growth capital firms united by their successful partnerships with limited partners and American businesses. More information about the AIC can be found at www.investmentcouncil.org.

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