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State Street’s Private Equity Index Rose to a 4.35 Percent Return in Q4 2019 – Up from Lows of Last Quarter

Company Release - 6/17/2020 10:30 AM ET

BOSTON--(BUSINESS WIRE)-- The State Street ℠ Private Equity Index (SSPEI) posted its second highest quarterly return in the past two years at 4.35 percent return in the fourth quarter of 2019, up from the 0.82 percent return in Q3 2019. Venture Capital funds rallied 5.68 percent after last quarter’s decline of -0.05 percent return, followed by 4.24 percent return from Buyout funds and 2.43 percent return from Private Debt funds.

The SSPEI is based on directly-sourced limited partnership data and represents more than $3 trillion in private equity investments, with more than 3,100 unique private equity partnerships, as of December 31, 2019.

“Private Equity performance rebounded in Q4 and scored a respectable 14.22% annualized return for 2019. The total capital raised in 2019 also surpassed the previous peak in 2007,” said Will Kinlaw, head of State Street Associates, a division of State Street Global Markets. “Certainly, the environment has changed considerably since the beginning of 2020 and it will take several months for us to better understand the impact of the global pandemic on private equity. The private equity cash flows that we are tracking up to March 2020 are showing clear signs of stress. The distribution rate in the first three months of 2020 is sitting at its lowest level in a decade.”

Additional fourth quarter highlights include:

  • All three strategies saw an uptick in quarterly returns. Venture Capital recovered from a trough of -0.05% in Q3 and led the three strategies with a 5.68% return. Buyout funds recorded 4.24% in Q4, an increase from 1.13% in Q3. Private Debt funds returned 2.43% in Q4, up from 0.63% in Q3.
  • Q4 2019 saw a depreciation in the USD against the Euro of 2.9%.
    • European-focused private equity funds recorded a quarterly gain of 8.13% in USD-denominated terms for Q4 2019 (5.01% in EUR-denominated IRR).
    • In USD-denominated terms, US-focused private equity funds experienced a 3.77% quarterly return in Q4, up from 0.87% in Q3; Funds focusing on the rest of the world returned 3.11%, up from 1.12% in Q3.
  • Health Care funds led among sectors with a strong quarterly return at 8.13%, rebounding from -0.21% in Q3. They were followed by Information Technology funds which posted a 6.33% quarterly return, up from 1.14% in Q3. Energy funds remained in negative territory for the third straight quarter with -2.77% in Q4, up from -3.39% in Q3.

For additional insights, or to learn more about the State Street Private Equity Index please visit http://www.ssgx.com/peindex.

Index returns reflect capital gains and losses, income, and the reinvestment of dividends.

It is not possible to invest directly in an index. Index performance does not reflect charges and expenses associated with the fund or brokerage commissions associated with buying and selling a fund.

Index performance is not meant to represent that of any fund.

About State Street Corporation

State Street Corporation (NYSE: STT) is one of the world's leading providers of financial services to institutional investors including investment servicing, investment management and investment research and trading. With $31.86 trillion in assets under custody and/or administration and $2.69 trillion* in assets under management as of March 31, 2020, State Street operates globally in more than 100 geographic markets and employs approximately 39,000 worldwide. For more information, visit State Street's website at www.statestreet.com.

*Assets under management as of March 31, 2020 includes approximately $50 billion of assets with respect to which State Street Global Advisors Funds Distributors, LLC (SSGA FD) serves as marketing agent; SSGA FD and State Street Global Advisors are affiliated.

Investing involves risk including the risk of loss of principal.

The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor. All material has been obtained from sources believed to be reliable. There is no representation or warranty as to the accuracy of the information and State Street shall have no liability for decisions based on such information.

The views expressed in this material are the views of State Street through the period ended May 27, 2020 and are subject to change based on market and other conditions.

This news announcement contains forward-looking statements as defined by United States securities laws, including statements about the financial outlook and business environment. Those statements are based on current expectations and involve a number of risks and uncertainties, including those set forth in State Street's 2015 annual report and subsequent SEC filings. State Street encourages investors to read the corporation's annual report, particularly the section on factors that may affect financial results, and its subsequent SEC filings for additional information with respect to any forward-looking statements and prior to making any investment decision. The forward-looking statements contained in this press release speak only as of the date hereof, June 8, 2020 and the company will not undertake efforts to revise those forward-looking statements to reflect events after this date.

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Expiration Date: 6/30/2021

3124035.1.1.AM.RTL

Brendan Paul
401 664-9182
BPaul2@StateStreet.com

Source: State Street Corporation