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peHUB Wire: Tuesday, April 6, 2010Random Ramblings
- Cognitive Dissonance Meets PE Fundraising
History shows that the best private equity returns come from investments made in economic downturns. The worse the fiscal shitstorm, the better the ROI. For example, Cambridge Associates reports that the best vintage for PE funds over the past two decades was 1991 -- a year that opened in the midst of a recession. The next-best vintage was 2001, which played host to a recession for eight months. Considering that 1991 and 2001 can't hold a candle to our current fiscal mess, PE funds raised in 2010 should eventually be considered on par with a 1996 Borolo (yes, I had to look that up). Except for one not-so-little problem: Precious few firms are able to raise funds right now.
- Christie's Recommendation Not Supported by Performance
Erin reported yesterday on an unfolding situation in New Jersey /56490/new-jerseys-investment-freeze-is-frozen-for-now/ where Governor-elect Chris Christie has asked that the state indefinately halt all alternative investment activities. The New Jersey Investment Board is reviewing the recommendation, but has not yet chosen to grant Christie's request. What we're still trying to figure out is why Christie singled out alternative assets. He gives no explanation in his memo, nor has he returned our calls. In the absence of rationale, we figured that it must have something to do with alternative investment returns, so we took a look at the state's most recent alternative investment results. This is where it gets strange: Certain segments of New Jersey's alternative asset returns don't look any worse than its returns in other asset classes. Take private equity, for example: PE returns for Q1 2009 were -2.77%, compared to an overall pension return of -5.91 percent (Q1 is the most recent quarter for which such data is available). Moreover, New Jersey's private equity performance was superior to the Cambridge Associates benchmark.
- PE and VC Returns Improve, But Exits Still Lacking
Cambridge Associates today released research showing that private equity and venture capital investments improved in Q2, after three straight quarters of shrinkage. On the downside (depending on your perspective), several public market indices performed better. Private returns still look better over the long term, growing, growing faster than all public markets for three years out and older. Also, capital calls to LPs during second quarter exceeded distributions. "New investments have required more equity than those made in recent years due to tight credit markets," said the report, which you can view after the jump...
- VC Performance Data: 10-Year Dip Begins
The National Venture Capital Association and Cambridge Associates today released new VC fund performance data, for the period ending June 30, 2009 (VC returns lag a month). Most time horizons remained unchanged from the prior quarter's report, except for a significant drop in the 10-year horizon. Expect that decade figure to really hit the skids come January 1, when the 1999 results peel away. Full release after the jump...
- Advice For Young Private Equity Hopefuls
In an LP panel at today's Private Equity Analyst Conference, investors in buyout funds doled out advice to anyone looking to enter the private equity market. Jack Troy, Partner, Troy Investment Associates Find a firm that has the values you like and an atmosphere of teaching. Look at TA Associates, for example. Anyone that knows Kevin Landry knows how many people he has taught the private equity business to. My advice? Find yourself a Kevin Landry.
- VC Performance Continues To Decline
Venture capital performance deteriorated in Q1, according to data released this morning by Cambridge Associates and the NVCA. It was the third-straight quarter of decline, although the rate slowed, and was seen over the quarterly, one-year, three-year, five-year and 10-year horizons (mild improvement for 15-year and 20-year). Get the full report after the jump...
- peHUB Wire: Wednesday, August 12, 2009
Random Ramblings
- peHUB Wire: Wednesday, August 12, 2009
Random Ramblings