Private Equity Assets Hit Record $3 Trillion

Jul 30 2012 | 5:52pm ET

The U.S. economy is struggling and parts of Europe are deep in a recession, but that hasn’t stopped the private equity industry from reaching new heights. Total assets under management held by private equity funds worldwide have reached record $3 trillion, according to Preqin.

According to the research firm, the  figure is  calculated using unrealized portfolio value  and  the ‘dry powder’ (uncalled capital) available to private  equity funds across the whole scope of the asset class.

Additionally, industry assets under management increased by 9% from December 2010 to December 2011, with buyout funds accounting for approximately 40% of the industry’s assets ($804 billion in unrealized portfolio value  plus $392 billion in ‘dry powder’), reports Preqin.

Private equity annualized horizon returns over 10 years to December 2011 stand at 11.9%, which is above that of the S&P 500 and MSCI Europe indices, but below the MSCI Emerging Markets index, which is showing a 13.9% return across the period.

And according to Preqin, distressed is best, with distressed private equity funds consistently outperforming the ‘All Private Equity Index’.

Bronwyn Williams, manager of performance data at Preqin, said: “The sustained growth of industry assets highlights the fact that private equity continues to be attractive to institutional investors that are willing to forgo liquidity in return for outperformance. Despite the uncertainty and volatility that has  prevailed in recent years, faith remains that  private equity  fund managers can still deliver  these returns.”


In Depth

JOBS Act Propels Real-Estate Crowdfunding Platform

Oct 21 2014 | 2:57am ET

If D.J. Paul were a real estate development, he would be described as “multi-use...

Lifestyle

Strippers Accused Of Robbing Hedge-Fund Manager Face Jail

Oct 20 2014 | 9:20am ET

A group of alleged stripper-thieves—whose victims include a hedge-fund manager...

Guest Contributor

PAAMCO: European Equity Exposure - Challenging Year, But All is Not Lost

Oct 16 2014 | 4:12am ET

European equity hedge fund managers have had a tough time so far this year. The...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…

 

Futures Magazine

October 2014 Cover

Deeply flawed risk benchmark

Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.