Private Equity Consistently Beats the S&P 500
Judge: “The value of private equity as an asset class is seen in its consistent outperformance of the S&P 500.”
Washington, D.C., April 3, 2012 – The Private Equity Growth Capital Council (PEGCC) released new analysis today, highlighting superior returns provided by private equity investing compared to the S&P 500. The research shows private equity outperformed the S&P 500 for 1, 3, 5, and 10-year time horizons by 11.5, 3.6, 7.5 and 7.2 percentage points, respectively.
“The value of private equity as an asset class is seen in its consistent outperformance of the S&P 500,” said PEGCC President & CEO, Steve Judge. “The superior returns from private equity are important for pension funds, as public market performance has lagged this last decade. Millions of Americans benefit from private equity returns as recipients of pensions, college scholarships, and charity,” Judge concludes.
Public pension funds also report similar superior returns provided by their private equity investments. Large pension funds continue to increase their allocation to private equity and other alternative assets to bolster total portfolio performance. PEGCC analysis of recently published data from 8 pension funds shows median private equity returns exceeded the S&P 500 for 1, 3, 5, and 10-year time horizons by 19.7, 2.7, 10.6, and 8.3 percentage points.
“The results of this analysis are supported by numerous academic studies computing the excess returns generated by private equity,” said Bronwyn Bailey, PEGCC Vice President of Research.
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