Australian private equity returns beat public markets

The country’s private equity and venture capital funds are delivering higher returns than several indexes, according to recent data from AVCAL and Cambridge Associates.

Australian private equity investments have outperformed the country’s stock index and other key asset benchmarks over a number of different time periods, according to figures from the Australian Private Equity & Venture Capital Association (AVCAL).

AVCAL together with Cambridge Associates developed the CA Australia Index to measure the performance of Australian private equity and venture capital. For the quarter ended in June, the CA Australia Index had annualised returns of 8.59 percent, 2.42 percent, 4.23 percent and 7.81 percent over one, three, five and 10 years respectively, AVCAL said in a statement.

The index’s quarterly return of 3.18 percent also compares favourably against -4.3 percent for the S&P/ASX 300 Index, 2.3 percent for the S&P/ASX Small Ordinaries Index and -9.3 percent for the UBS Australian Composite Bond Index.

“The index demonstrates that private equity is overall delivering substantial – and importantly, consistent – net returns to investors over multiple time horizons,” Katherine Woodthorpe, AVCAL’s CEO, said in the statement.

“The increased number of exits this year has also seen many of these investments delivering excellent returns to the pension funds and other institutional funds who are the primary investors in this asset class.”