European private equity beats public market

European buyout returns continue to outperform the Stoxx 600 Index, seeing positive returns in the first half year of this year, in all the different deal size categories, according to a study.

Good news for GPs trying to attract investors: European private equity returns continue to outperform the European stock market, a Thomson Reuters report revealed.

This year until the end of June, European buyout funds generated a 6 percent return compared to the negative 4.5 percent return from the European Stoxx 600 Index.

In addition, buyout funds saw positive returns in all the different deal size categories in the first half a year, the study found. Small buyout funds with $400 million or less returned 3.6 percent in the first half of the year. Large buyouts vehicles, funds between $1 billion and $5 billion, returned 5.9 percent while medium buyouts, funds between $400 million and $1 billion, returned 12 percent. 

Buyout funds also generated better results over a 10 year period, returning 9 percent compared to 3.7 percent from the Stoxx 600 Index and 4.2 percent from the FTSE 100 Index.

Venture Capital returns did not show strong results, returning 0.6 percent in the first half year, a 4.7 percentage point decrease from December 2011.

The report is based on the latest quarterly statistics from Thomson Reuters' private equity performance database. It analyses the cash flows and returns for more than 1,395 European venture capital and private equity funds with a total of €332.9 billion.