WASHINGTON –The Private Equity Growth Capital Council (PEGCC) has released its latest Performance Update Report. The report shows that private equity’s double-digit returns on a short, medium and long-term basis provide pensioners with a source of consistently superior risk-adjusted returns.
According to the report, which is based on returns through June 2015, the median private equity benchmark for the past year returned 12 percent, outperforming the S&P 500 by 4.6 percent. On a 10-year horizon, private equity’s annualized returns increased to 13.1 percent, outperforming the S&P 500 by 5.2 percent.
“The data show private equity’s ability to maintain strong returns in a variety of market conditions, which helps to support its investors’ financial goals, such as pensioners’ retirement security,” said Bronwyn Bailey, PEGCC’s Vice President of Research. “Consider the one-year ending in June 2015 when public market gains stagnated, but private equity consistently performed.”
For major public retirement funds like the Iowa Public Employees’ Retirement System Fund (IPERS), private equity has been one of the top performing asset classes. With more than $3 billion invested in private equity, IPERS’ private equity portfolio has achieved annualized returns of 15 percent over a 10-year horizon, nearly doubling the returns of the S&P 500. IPERS’ allocation to private equity is 11.3 percent.
You can read the full report here.