Australian PE outperforms S&P/ASX 300

Australian private equity funds returned 7.7% in the past year, versus the S&P/ASX 300's 3.8%, according to the latest data released from Cambridge and AVCAL.

Australian fund managers were given something to boast about this week, as figures from a Cambridge Associates and Australian Private Equity and Venture Capital association report showed that the Australian funds outperformed the S&P/ASX 300 for the quarter ended in March, as well as over the past one-, three- and five-year time horizons (see chart at bottom).

The positive figures come as the industry faces challenges in the form of rising currency as well as changes to its LP base, as detailed in the forthcoming issue of PE Asia

The report pegged the Cambridge Associates Australia Private Equity and Venture Capital Index – an end-to-end calculation net fees and carry, which used data from 49 Australia private equity and 17 Australia venture capital funds – against three other local indices including the S&P/ASX 300.

The report also noted that post-crisis investments in particular have continued to perform strongly, with funds from 2008, 2009 and 2010 registering double digit internal rate of returns.

Index (A$)  1- Quarter   1- Year  3-Years   5-Years  10-years
 Cambridge Associates LLC Australia Private Equity & Venture Capital Index (A$) 1  1.8  7.7  1.5  4.8  7.8 
 S&P/ASX 300 Index  3.1  3.8  1.1  3.2  8.9
 UBS Australian Composite Bond Index  2.0  6.9  7.4  6.0  5.8
 S&P/ASX Small Ordinaries Index  (1..2)  13.5  (0.9)  2.8  9.9

1 Pooled end-to-end return, net of fees, expenses, and carried interest.

Source: Australian Private Equity & Venture Capital Association, Cambridge Associates
Note: Figures as of 31 March 2011