Report Shows Private Equity Ideal For Long-Term Investment
WASHINGTON, D.C. – Private equity remains the best source of returns for long-term investors, according to the latest Performance Update Report from the Private Equity Growth Capital Council (PEGCC).
The report reveals that private equity funds invested by large U.S. pensions outperformed the public markets by 4.9 percent annually over a 10-year horizon. The median private equity benchmark return (excluding venture capital) was 12.9 percent, net of fees, over a 10-year horizon, compared to eight percent by the S&P 500 index over the same time period. The results are based on private equity fund returns as of March 31, 2015.
“This latest report shows the continued trend of private equity outperforming all other asset classes over the long-term.” said Bronwyn Bailey, PEGCC’s Vice President of Research. “The consistency and strength of private equity returns, net of fees, is the reason why private equity is critically important to retirement security in our country.”
Specific examples of pensions with excellent private equity returns include:
– The Massachusetts Pension Reserves Investment Trust Fund has $6.8 billion invested in private equity, and the pension’s private equity fund investments returned 16.9 percent, net of fees, annually over a 10-year horizon. By comparison, the S&P 500 returned 8 percent over that same period, including dividends.
– The Illinois Teachers’ Retirement System has more than $5 billion invested in private equity, and the pension’s private equity fund investments returned 14.3 percent, net of fees, annually over a 10-year horizon.
You can read the full report here.
About the Private Equity Performance Update
The 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 March 31, 2015, the most current data available. All returns are calculated net of fees.
