Driven by a Weak US Dollar, European Private Equity Funds Post 10.5
Percent Gain
BOSTON--(BUSINESS WIRE)--
The State Street Global ExchangeSM Private Equity Index
(GXPEI) ended the second quarter of 2017 with continued strong
performance of 3.96 percent, in line with the 3.95 percent return posted
in the first quarter.
The GXPEI is based on directly-sourced limited partnership data and
represents more than $2.5 trillion in private equity investments, with
more than 2,800 unique private equity partnerships, as of June 30 2017.
“European funds had a very strong quarter, partly driven by a weaker US
dollar,” said Will Kinlaw, senior managing director and global head of
State Street Associates®, a division of State Street Global Exchange.
“However, setting aside the foreign exchange impact, the European funds
still achieved a 3.72 percent quarterly return in Euro, outperforming
the US private equity funds in local currency terms. Interestingly, the
GXPEI confirms the European recovery we have seen from public market in
2017.”
Second Quarter Highlights Include:
-
Buyout funds posted a 4.73% gain in Q2, extending its streak as the
leading segment among the three main strategies to six consecutive
quarters. Private Debt funds maintained a steady gain of 3.08% while
Venture Capital fund returns dropped to 1.84%.
-
European-focused private equity funds experienced a 10.54% quarterly
gain in USD-denominated terms (3.72% in EUR-denominated IRR).
US-focused funds returned 2.62%, while funds focused on the rest of
the world gained 3.05%.
-
Among all sectors covered, industrials-focused funds saw the highest
return, with a 4.73% gain, followed by consumer-focused funds with a
return of 4.36%. Energy-focused funds posted a narrow gain of 0.26%,
down from the peak of 7.79% in Q2 2016.
-
Q2 2017 saw higher volumes in both cash contribution and distribution
compared to the same period of 2016. However, distribution remained at
a higher level than contribution, thus investors received positive net
cash flows in Q2.
“Private Equity fundraising has been increasing in recent years, however
firms have been slow to deploy their capital in the first half of the
year due to delays in the US tax reform and political
uncertainty. Perhaps such uncertainty may create opportunities for
Buyout funds,” said Anthony Catino, managing director, Alternative
Investment Solutions for State Street.
For additional insights, or to learn more about the GX 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 particular fund.
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State Street Corporation
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JEKane@statestreet.com
@StateStreet
Source: State Street Corporation