ILPA and Cambridge Associates Release Private Markets Benchmark

This week, the Institutional Limited Partners Association (ILPA) released its ILPA Private Markets Benchmark, the organization’s proprietary performance benchmark conducted in partnership with Cambridge Associates. As of September 30, 2012, the benchmark for U.S. Private Equity (including venture capital funds) reported a 13.55 percent annualized 10-year return. Performance for international funds – which excludes those funds based in the U.S. – was 13.95 percent over ten years.

The goal of the ILPA Private Markets Benchmark, according to the organization, is “to accurately and consistently represent the global investible universe and asset class performance for institutional investors.” The benchmark includes more than 1,800 institutional funds.

These superior returns ultimately benefit private equity’s investors, including pension funds, university endowments and charitable organizations, which represent 61 percent of private equity investment.

PEGCC research released last November showed the significant outperformance of private equity investment for large public pension plans over long time horizons. The research found that private equity delivered an 8.8 percent median 10-year annualized return to large public pension plans, the highest of all other asset classes. These results show that private equity strengthens the retirement security of teachers, policemen, firefighters and in communities across the country.