Private Equity and Venture Capital Funds in ex U.S. Developed and Emerging Markets Lagged Public Equities but Delivered Solid Positive First Quarter Returns, According to Cambridge Associates Benchmarks
Media Sector Posted Largest Quarterly Gain in Developed Markets Index, Continuing Trend From 2011, While Financial Services Led the Way among Larger Sectors in Emerging Markets
(firmenpresse) - BOSTON, MA -- (Marketwire) -- 09/25/12 -- Helped in part by a relatively stronger Euro, private equity and venture capital funds invested primarily in developed and emerging markets outside the U.S. joined public equities worldwide in delivering strong results for the first quarter of 2012. However, these alternative asset classes were largely outperformed by their public counterparts, according to a new commentary from (C|A).
Following a small loss in the final quarter of 2011, the returned 7.5%, in U.S. dollar terms, for the three-month period ending March 31, 2012. For comparison, the comparable public equity index (MSCI EAFEearned 10.9% for the same period. The improved more than five percent from its prior-quarter return to earn 6.4% for the first quarter. Its corresponding public market benchmark (MSCI Emerging Markets Index) earned 14.1%.
The table below provides comparative performance data of the two CA benchmarks versus their public markets counterparts over a variety of time horizons ending on March 31, 2012.
Sources: Cambridge Associates LLC, MSCI Inc., Standard & Poor's, and Thomson Reuters Datastream. MSCI data provided "as is" without any express or implied warranties.
The CA developed markets index outperformed the MSCI EAFE in every period listed in the table above except for the first quarter. CA's emerging markets index was less consistent, but outperformed its public equities counterpart, the MSCI Emerging Markets Index, in four of the seven periods listed.
For the Quarter, the 2005 Funds Topped both the Developed and Emerging Markets, and Every Large Vintage Year in Each Index Had a Positive Return
Funds launched in 2006, the largest vintage year in the developed markets index, representing almost one-third (31.6%) of its value, earned 8.5% in the first quarter. Of the five significantly sized vintage years in the developed markets index, the 2005 funds, the third largest vintage, returned 8.9%, making it the top performer of the group. A strong media sector was the primary driver of that vintage year's performance. All five of the largest vintages had positive earnings for the quarter.
The emerging markets index was more concentrated than the developed markets index, with only four vintage years representing 5% or more of the index's value. As in the developed markets index, all of these significantly sized vintages yielded positive returns for the quarter. The 2005 vintage funds, representing almost one-fifth (19%) of the index's value, again topped the list, earning the same return as their developed market counterparts: 8.9%. Their performance was due primarily to valuation increases in financial services, IT, and manufacturing. The largest vintage in the emerging markets index, funds launched in 2007, earned a 6.4% return and represented 38.4% of the index's value.
All of the Largest Sectors in both Indices also had Positive Returns for the Quarter. Media Was the Top Sector in the Developed Markets Index, Financial Services in the Emerging Markets Index
"Although there was little improvement in the underlying economic conditions in Europe -- and for the most part, elsewhere -- the largest sectors in each index were positive for the quarter, which helped drive fund performances across the board," said Miriam Schmitter, Managing Director and head of Cambridge Associates' international private equity and venture capital research. "Of the seven largest sectors in the developed index, media was far and away the top performer, returning 21.5% for the quarter. This continued a long-standing trend for that sector, which was also the top performer among meaningfully-sized sectors for the previous year. In the emerging markets index, financial services was the best-performing sector, earning 10.2% for the quarter. Consumer, perennially the largest sector in each index, returned 10.4% in the developed markets index and 6.3% in the emerging markets index."
This was the first time in a year that all of the meaningfully-sized sectors in the emerging markets index earned positive returns in a quarter.
Capital Calls Rose in the Developed Markets Index but Fell in Emerging Markets; Capital Distributions Were Down in Both Indices
Fund managers in the developed markets index raised $8.9 billion from their investors during the first quarter, an 11.2% increase from the quarter prior. Capital distributions to investors, however, were down sharply, to $6.6 billion -- a 53.7% decline and the smallest capital distribution to investors in almost two years. Investors in the 2006 and 2007 funds responded to the majority of the capital calls, contributing almost 72% of the total capital collected. Investors in the 2004 and 2005 funds collected the bulk of the capital distributions -- roughly 50% of the total.
In the emerging markets index, capital calls and distributions both dropped from the prior quarter. Contributions were down almost a quarter (24%), to $2.8 billion; distributions fell to $1.7 billion, a 45% drop. Fund managers of the largest vintage year, 2007, called almost $1.3 billion from their investors, representing 48.4% of the total. Managers of the 2005 vintage year funds returned more than $700 million to their investors, or 41% of the total capital returns for the quarter.
The Bulk of Developed Markets Investments Continued to be in Europe
Fund managers in the developed markets index continued to place the great majority of their capital investments -- a total of 87% -- into companies based in Western Europe. This was 8% higher than the historical average for the index. Companies based in the U.K represented the greatest single-country weight in the index, 22%, and also yielded the highest return: 12.8%.
Mainland China and India represented the majority (54%) of the value of the emerging markets index and together returned, on a dollar-weighted basis, 6.4%. Companies based in mainland China earned the worst return of the three largest regions, 3.6%.
Brazil dropped below the threshold for being considered meaningfully-sized in the emerging markets index, leaving just mainland China, India, and Russia in that category. Of the three, companies in Russia came out on top for the quarter, returning 18%. India-based companies earned 11.8%.
Founded in 1973, Cambridge Associates is a provider of independent investment advice and research to institutional investors and private clients worldwide. Today the firm serves over 900 global investors and delivers a range of services, including investment consulting, outsourced portfolio solutions, research services and tools (Research Navigator(SM) and Benchmark Calculator), and performance monitoring, across all asset classes. The firm compiles the performance results for more than 4,800 private partnerships and their nearly 65,000 portfolio company investments to publish proprietary private investments. Cambridge Associates has more than 1,000 employees serving its client base globally and maintains offices in Arlington, VA; Boston; Dallas; Menlo Park, CA; London; Singapore; Sydney; and Beijing. Cambridge Associates consists of five global investment consulting affiliates that are all under common ownership and control. For more information about Cambridge Associates, please visit .
Cambridge Associates has been selected to provide data and to develop and maintain customized industry benchmarks for a number of prominent industry associations, including the Australian Private Equity & Venture Capital Association Limited (AVCAL); the African Venture Capital Association (AVCA); the Hong Kong Venture Capital and Private Equity Association (HKVCA); the Indian Private Equity and Venture Capital Association (IVCA); the New Zealand Private Equity & Venture Capital Association Inc. (NZVCA); and the National Venture Capital Association (NVCA). Cambridge also provides data and analysis to the Emerging Markets Private Equity Association (EMPEA). The pooled means represent the net end-to-end rates of return calculated on the aggregate of all cash flows and market values as reported to Cambridge Associates by the funds' general partners in their quarterly and annual audited financial reports. These returns are net of management fees, expenses, and performance fees that take the form of a carried interest.
Inquiries about these indices should be addressed to: Frank Lentini at Sommerfield Communications, 156 Fifth Avenue Suite 1219, New York, NY 10010; 212.255.8386; (fax) 212.255.8459; email .
Media Contact:
Frank Lentini
Sommerfield Communications, Inc.
212-255-8386
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Datum: 25.09.2012 - 07:00 Uhr
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