Australian private equity and venture capital investments continued to outperform the country's stock market over one, three and five-year horizons, according to data from Q1.
The Cambridge Associates LLC Australia Private Equity and Venture Capital Index gave annualised returns for those periods of 7.7%, 1.5% and 4.8% respectively, as against 3.8%, 1.1% and 3.2% for the S&P/ASX 300 Index of public equities.
The strength of the Australian dollar means the results are even higher if they are given in US dollar terms.
The index is estimated to represent approximately 70% of the dollars raised by institutional-quality private equity and venture capital firms in Australia.
“Private equity and venture capital are not only a high-performing asset class over the medium to longer-term time horizons, but are less volatile than many may think, as the latest index figures attest,” said Dr. Katherine Woodthorpe, CEO of AVCAL, the Australian Private Equity and Venture Capital Association, a strategic partner of Cambridge Associates in the creation of the index.
However, the index reveals that in Q1 itself, and on a ten-year time horizon, the S&P/ASX 300 outperformed, returning 3.1% and 8.9% as against 1.8% and 7.8% for private equity.
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