New Performance Update Report Shows Private Equity Outperforms The S&P 500 By 4.5 Percent
WASHINGTON, D.C. – The American Investment Council (AIC) released its latest Performance Update Report today, showing that private equity continued to provide investors with superior medium- to long-term risk-adjusted returns through Q4 of 2015. According to the report, annualized private equity investments over 3-, 5-, and 10-year horizons each provided investors with double-digit returns. The median private equity benchmark on a 1-year basis returned 5.9 percent, outperforming the S&P 500 by 4.5 percent.
“With each Performance Update we produce, we see the alignment of interests between private equity funds and their investors on full display,” said AIC President and CEO, Mike Sommers. “The returns speak to the strong performance of private equity as an industry. The full story, of course, is that these returns help deliver a financially secure retirement for millions of pensioners and help support our universities and colleges nationwide.”
Public pension funds continued to benefit from private equity investments, with retiree investments in private equity outperforming the S&P 500 over the year-to-year, 5-year, and 10-year horizons. The median 1-year pension private equity return was 9.4 percent, outperforming the S&P 500’s return rate of 1.4 percent.
“As market conditions shift, the strategic, long-term nature of private equity makes it a consistent source of growth for institutional investors,” said Bronwyn Bailey, AIC’s Vice President of Research and Investor Relations. “Pension funds and other investors are maintaining or adding to their private equity allocations, amidst low interest rates and the growing recognition that private equity is a proven asset class for strong returns over mid-to long-term horizons.”
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.