State Street’s GX Private Equity Index Shows Modest Rebound After Q3 2015 Drop
May 26 2016 - 12:00PM
Business Wire
Plunging Energy Prices Create Strong Headwinds for Buyout Funds
in 2015
State Street Corporation (NYSE:STT) today announced the results
of its GX Private Equity IndexSM, a benchmark for comparative
analysis of private equity performance, which includes a
comprehensive data set dating back to 1980. In the fourth quarter
of 2015, the index saw an overall return of 1.11 percent.
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Q4 Private Equity Index (Graphic:
Business Wire)
“Private equity funds posted a modest recovery in the fourth
quarter after a brief drop in the previous quarter,” said Will
Kinlaw, senior managing director and global head of State Street
Associates, part of State Street Global Exchange. “Overall we have
seen relatively steady performance in private equity investments
for the past few years. The biggest driver in the fourth quarter
rebound was the continued trend of impressive growth by venture
capital funds, which haven’t posted a negative return since
2012.”
The Index is based on directly sourced limited partnership data
and represents more than $2 trillion in private equity investments,
with more than 2,500 unique private equity partnerships, as of
March 31, 2016.
“Private equity returns for 2015 posted a 6.55 percent return in
the US, compared to negative returns of both the S&P 500 and
Russell 3000®,” continued Kinlaw.
Additional Fourth Quarter Highlights Include:
- Capital deployment (capital drawdowns
for new investment) remained steady in 2015 relative to 2013 and
2014. However, in Q1 2016 they dropped to their lowest level since
early 2009.
- Private equity funds in the US posted a
0.42% return in the fourth quarter, an increase from -1.43% in the
third quarter. For the one year return, US private equity funds
recorded 6.55%.
- European-focused private equity funds
recorded a return of 1.94% in the fourth quarter against a
relatively fragile economic backdrop.
- Private equity funds outside of the US
and Europe, primarily made up of emerging market funds, remain
quite volatile with a quarterly performance of 3.63% in Q4 2015, up
from-3.13% in Q3.
“When you look at three-year performance track records, you see
that venture capital funds have delivered outsized returns in
recent years while buyout and private debt funds showed signs of
slowing down toward the end of 2015,” said Kinlaw.
“The plunging price in energy and commodities continued to have
a significant impact on the performance of private equity, and
specifically buyout funds in 2015,” said Anthony Catino, managing
director of State Street’s alternative investment solutions
business. “However, we have also seen signs that some private
equity firms are looking for opportunities to pick up assets and
entire companies, with the hope to take advantage of cheap
valuation.”
For additional insights, or to learn more about the GX Private
Equity Index please visit http://www.ssgx.com/peindex.
About State Street
State Street Corporation (NYSE: STT) is one of the world's
leading providers of financial services to institutional investors,
including investment servicing, investment management and
investment research and trading. With $27 trillion in assets under
custody and administration and $2 trillion* in assets under
management as of March 31, 2016, State Street operates in more than
100 geographic markets worldwide, including the US, Canada, Europe,
the Middle East and Asia. For more information, visit State
Street’s website at www.statestreet.com.
* Assets under management include approximately $32.6 billion as
of March 31, 2016, for which State Street Global Markets, LLC, an
affiliate of SSGA, serves as the marketing agent.
Past performance is no guarantee of future results.
Performance of an index is not illustrative of any particular
investment. It is not possible to invest directly in an index.
State Street Corporation One Lincoln Street, Boston, MA
02111-2900.
© 2016 State Street Corporation - All Rights Reserved
CORP-2001
Exp. Date - 05/31/2017
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State Street CorporationJulie Kane, 1
617-664-3001jekane@statestreet.com@StateStreet
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