ILPA, Cambridge release industry benchmark

The Institutional Limited Partners Association’s collaboration with Cambridge Associates created a subset of data using private equity and venture capital funds from ILPA members’ portfolios.

The Institutional Limited Partners Association has released its new private markets performance benchmark, a collaboration with Cambridge Associates that includes more than 1,800 private equity and venture capital funds, the organisation said in a statement Monday. 

To create the benchmark, ILPA polled its members to determine what vehicles they had invested in, ILPA managing director Mike Elio told Private Equity International. The LP organisation ultimately came up with a list of approximately 5,000 funds, which was then checked against the list of approximately 4,000 funds used to create existing Cambridge benchmarks, he said. 

Cambridge used performance data from the more than 1,800 funds that overlapped between the ILPA list and Cambridge benchmark to create a subset of data, dubbed the ILPA Private Markets Benchmark.  

“Cambridge has a proven process, we’re not recreating the wheel,” Elio said. 

The ILPA Private Markets Benchmark for US private equity notched a 13.55 percent 10-year return as of 30 September, the most recent quarter for which data was available. Non-US funds generated a 13.95 percent return over the same period.  

“Overall, the medians tend to be slightly higher than the Cambridge benchmark and the standard deviation tends to be much lower,” Elio said. “We are pleased with the results. They fall right in with what we’d expect with institutional investors.”

Moving forward, ILPA will reach out to members’ fund managers not covered by the benchmark in an effort to get them to release data to Cambridge, which will create a more comprehensive measure of ILPA members’ performance, Elio said. 

ILPA is a private equity organisation dedicated to the advancement of limited partner interests. The organisation has approximately 275 members that represent more than $1 trillion in assets under management.