Private equity returns around the world dipped into the red in the March quarter, according to State Street’s global private equity index.
The index, launched last year, is based on statistics for about 4,000 investment commitments totalling $200 billion, compiled by State Street Investment Analytics’ Private Edge Group. The latest figures show total returns at minus 0.87 per cent for the March quarter, against positive returns of 3.18 per cent in the December quarter, 2.26 per cent in the September, 8.55 per cent in the June and 5.76 per cent in the previous March periods. Gerard Labonte, State Street vice president in charge of Private Edge, said that while private equity was not immune to the turbulence in financial markets, swings in valuations were tempered by the focus on long-term management of underlying investments instead of reaction to quarterly earnings announcements. Labonte was bullish on prospects for new private equity fund launches in the current environment. He said: “We’ve noticed that funds launched in 2003, the year of the most recent (public) market bottom, have performed quite well in comparison to their peers. “If recent history is any indication, funds launched in turbulent times can obtain pricing advantages to generate significant long-term returns”. The long-term IRR for the 1,168 US-only funds measured by the index was 13.9 per cent compared with 20.6 per cent for the 248 international-only funds.
The role of IFM Investors in arranging a visit by a delegation of Australian super funds to the US last month gives a pointer to the scale of the longer-term ambitions of the global super-fund-owned asset manager, and a recent investment in the manager by the UK pension fund NEST is designed to give it even greater clout. IFM chair Cath Bowtell tells Investment Magazine the manager aims to be a partner to governments around the world as they seek capital to build critical infrastructure.
Glenda KorporaalMarch 21, 2025
