Medium-term private equity performance improves

Private equity revealed muted performance over a 10-year period for the quarter ending March 2014, while medium-term figures continue to show strong improvement, according to the latest RisCura SAVCA South African Private Equity Performance Report. Over a 10-year rolling period ending in March 2014, the asset class delivered a pooled internal rate of return (IRR) of 21.2%, slightly below December’s 22.1%.

Comparatively, over a five-year period IRRs increased for the fourth consecutive quarter, reaching 19% at the end of March 2014, up from December’s 16.7%. The asset class remained relatively unchanged over a three-year period with IRRs of 13.9% for March 2014, compared to 13.7% in the previous quarter.

Measured in US dollars, the asset class has returned 18% over 10 years, down from 19.6% the previous quarter. Over a three-year period, IRRs moved slightly higher to -1.1% in March 2014 from -1.5% in December, reflecting the rand’s recovery from weaker levels observed in the previous quarter.

Compared to leading public indices, private equity again lagged the Financial and Industrial Total Return Index (FINDI TRI) over 10, five and three years. Over 10 years, it has beaten the FTSE/JSE All Share Total Return Index (ALSI TRI) and FTSE/JSE Shareholder Weighted Total Return Index (SWIX) returning 21.2% versus 19.6% and 20.5%, respectively.

Over three- and five-year periods, the asset class has lagged all indices, returning 19% over five years, compared with the ALSI’s 22.5%. Over three years, it returned 13.9% versus 17.5% for the ALSI, and 19.2% and 28.1% for the SWIX and FINDI, respectively. Copyright. HedgeNews Africa – August 2014.

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