28/May/10

Private Equity Outperforms

The British Private Equity and Venture Capital Association has published its Performance Measurement Survey, assessing the performance of 470 UK-managed independent private equity and venture capital funds in 2009.

Please find below its press release relating to the survey findings:

• The survey shows that despite a challenging year for UK private equity in 2009, returns continue to display notable stability over the long term. The annual IRR per annum on a since-inception basis from December 2001 has ranged from a low of 13% to a high of 17.3%, with a 15.9% overall long-term net return to investors to 31 December 2009**. The long term nature of the asset class determines that value is built over a period of time.

• The data also reveals that investors who were able to commit to private equity during testing economic periods in the past have achieved superior returns on their investment. This is demonstrated by the since-inception returns generated by funds raised during the previous downturns and recovery periods, in particular between 1991 and 1995, and 2000 and 2004.

• Over the medium to longer term, UK private equity continues to outperform other asset classes. The ten-year IRR for all funds stands at 13.1% against 3.1% for Total UK Pension Funds Assets*** and 1.6% for the FTSE all-share over the same ten year period.

Performance Percentage per annum:

Total UK Private Equity - 10 years: 13.1% 5 years: 17.3% 3 years: 4.4%
Total Pension Funds Assets - 10 years: 3.1% 5 years: 6.2% 3 years: 0.6%
FTSE All-Share - 10 years: 1.6% 5 years: 6.5% 3 years: -1.3%

• In the short term, the severe economic recession resulted in a year of low activity for the industry, as reflected by a significantly lower amount of capital calls and distributions. Valuations, however, held up due to a combination of recovering comparable valuation multiples and the industry’s focus on providing active support to existing portfolio investments in order to create and protect value in a challenging environment.

* PEITs are shown as a separate category for comparison purposes, although not included in the main analysis of independent funds.
** The survey is sterling-based, aiming to provide LPs with an indication of the returns they can expect in sterling terms. For this reason, all cash flows of the non-sterling denominated funds in the study are converted into sterling using the appropriate daily exchange rate to produce pooled IRRs.
*** As shown in the WM All Funds Universe.

The full summary of the 2009 survey can be viewed from the download section of this website.

For further information please contact:
Mei Niu, BVCA: 020 7420 1818 begin_of_the_skype_highlighting              020 7420 1818      end_of_the_skype_highlighting begin_of_the_skype_highlighting              020 7420 1818      end_of_the_skype_highlighting
Ashley Coups, PricewaterhouseCoopers LLP: 020 7804 9609

Notes to Editors
The BVCA - the British Private Equity and Venture Capital Association - is the industry body for the UK private equity and venture capital industry. The BVCA has over 470 member firms, representing the overwhelming number of UK-based private equity and venture capital firms and their advisers.

PricewaterhouseCoopers provides industry-focused assurance, tax, and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 155,000 people in 153 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice.
"PricewaterhouseCoopers" refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.



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