PEGCC Q3 2013 Performance Update: Private Equity Bests S&P 500 Over 5- and 10-year Horizons

Judge: “Private equity strengthens companies over the long term, and it shows in our most recent Performance Update.” 

Washington, D.C., April 4, 2014Private equity returns significantly outperformed the S&P 500 according to the most recent Performance Update from the Private Equity Growth Capital Council (PEGCC).  As of September 30, 2013, returns from private equity (net of fees) beat the S&P 500 (including dividends) for 5- and 10-year horizons by 1 and 6 percentage points, respectively.  While private equity generated more than 15 percent annualized returns for the 1- and 3-year time horizons, private equity funds underperformed the S&P 500 during these periods as a result of the post-crisis public market rebound and last year’s rally.

“Private equity strengthens companies over the long term, and it shows in our most recent Performance Update,” said PEGCC President and CEO Steve Judge.  “Pension funds, charitable foundations, and university endowments that invest in private equity benefit greatly from private equity’s long term outperformance of the public markets, which means more secure retirements, increased charitable work in communities, and enhanced financial aid packages for students.”

The PEGCC’s measure for private equity fund performance is based on the median of publicly available benchmarks.  This measure indicates private equity funds returned an annualized 14.1, 11.0, 15.8, and 17.4 percent during 10-year, 5-year, 3-year and 1-year periods, respectively.

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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, 2013, the most current data available.  All returns are calculated net of fees.