BOSTON--(BUSINESS WIRE)--
The State Street Global Exchange® Private Equity Index
(GXPEI) posted its second highest quarterly return of the past two years
at 3.99 percent in the second quarter of 2018. The venture capital
category held its lead for the second quarter in a row with a 4.64
percent gain, followed closely by buyout funds with a 4.18 percent
return; but private debt lagged behind with a 1.90 percent return for
the quarter.
The PEI is based on directly-sourced limited partnership data and
represents more than $2.8 trillion in private equity investments, with
more than 2,900 unique private equity partnerships, as of June 30, 2018.
“Overall the second quarter of 2018 has seen a good recovery from the
volatile first quarter. However, the growth is not universal across the
index,” said Will Kinlaw, global head of State Street Associates®,
a division of State Street Global Exchange. "In particular, information
technology and energy sectors stand out from the crowd, largely
benefiting the venture capitalist and energy-focused funds. Although
private debt funds show a below average return this quarter, their fund
raising activity has been particularly strong in 2018. To date, they
have raised almost the same amount of capital in the first two quarters
of this year as they did in all of 2017.”
“The US dollar appreciated against major currencies, including the euro
in the second quarter, partially due to rising interest rates and good
economic data,” said Anthony Catino, managing director, Alternative
Investment Solutions for State Street. “This contributed to a lower US
dollar denominated return than euro denominated return for the Europe
focused funds. Time will tell the overall impact of the dollar’s
stability on FX returns as we head towards the end of 2018.”
Second Quarter Highlights Include:
-
Venture capital funds led the three main private equity strategies
(Venture Capital, Buyout, and Private Debt) for the second quarter in
a row.
-
The 4.64% return was the highest for venture capital funds since
Q4 2014
-
Private debt was the only strategy to see a decrease in returns,
dropping to 1.90% from 2.46% in Q1, posting the lowest returns for
that strategy since Q1 2016.
-
Buyout funds returned 4.18% for the quarter, up from 2.09% in Q1, and
the venture capital fund return of 4.64% was up from 3.78% in Q1.
-
Q2 2018 saw the US dollar appreciate 5.34% against the euro, and
general USD appreciation against world currencies.
-
European-focused private equity funds experienced a 3.12%
quarterly gain in USD-denominated terms (8.61% in EUR-denominated
IRR).
-
In USD denominated terms, US focused funds returned 4.70% for the
quarter, while the rest of the world returned 1.66%.
-
Among sectors, information technology funds led for the second
straight quarter with a 7.05% quarterly return, up from 5.20% in Q1.
They were followed by energy funds with a 4.62% quarterly return,
rebounding from 0.62% in the previous quarter, and health care funds
with a 4.24% quarterly return. Financials were the only sector to see
a decrease in returns, generating 1.69% compared to 4.93% in Q1.
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.
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 $33.99 trillion in assets under custody and administration
and $2.81 trillion* in assets under management as of September 30, 2018,
State Street operates in more than 100 geographic markets worldwide,
including the US, Canada, Europe, the Middle East and Asia. For more
information, visit State Street’s website at www.statestreet.com.
*This figure is presented as of September 30, 2018 and includes
approximately $28 billion of assets with respect to SPDR products for
which State Street Global Advisors Funds Distributors, LLC (SSGA FD)
acts solely as the marketing agent. SSGA FD and State Street Global
Advisors are affiliated.
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State Street Corporation
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KCDoherty@statestreet.com
@StateStreet
Source: State Street Corporation