Last year saw the highest annual capital distributions in the history of the private equity benchmark index, despite a poorly performing energy sector weighing on Q4 returns, according to Cambridge Associates.
Fund managers returned $153.5 billion to their LPs in the year ended 31 December 2014, up $19.4 billion, or 14 percent, from a year earlier. Capital calls also increased to their highest levels since 2008, with LPs committing $84.9 billion to funds, up $25.7 billion, or 43 percent, from 2013.
Private equity returns for 2014 fell short of those the previous year, at 11.2 percent.
PE returns for the fourth quarter were 0.8 percent. This reflected poor performance in the heavily-weighted energy sector, which dropped 2.4 percent. Energy was the only one of seven major sectors in the PE index to produce a negative return. Healthcare came top with 29.2 percent in returns, followed by software (24.7 percent) and IT (24.3 percent).
The report cites Dealogic's data which found that 78 PE-backed companies filed for IPOs during the year with a total value of $30 billion. This was $600 million short of 2013, despite the same number of IPOs. In the fourth quarter, 23 companies went public at a total of $7.7 billion.
There were 814 M&A transactions throughout the year, up from 733 in 2013, with an average size of $455 million per deal for the 263 that were publicly available. In the fourth quarter, there were 202 M&A transactions, seven fewer than the number of deals in the prior quarter.
As of 31 December, the Boston-based research firm's PE database for the benchmark comprised 1,199 US buyout, PE energy and growth equity and mezzanine funds formed between 1986 and 2014, with a value of almost $625.1 billion.