Click here to close now.




















Welcome!

News Feed Item

Private Equity Distributions Hit an All-Time High in 2013, and Venture Capital Produced Its Highest Annual Return in 15 Years, According to Cambridge Associates Benchmarks

Both Benchmarks Lagged Public Equity Returns for the Year; Only VC Topped Public Equities in Q4, Though Both PE and VC Earned Solid Returns for the Quarter

BOSTON, MA -- (Marketwired) -- 07/16/14 -- During a 2013 in which low interest rates pushed many investors into equities, the public equity markets saw stellar returns, beating out the performance of investments in US private equity and venture capital for the year. But these alternative assets also fared well, with US private equity and venture capital funds having their best annual returns since 2006 and 1999, respectively. Investors in private equity funds received the largest total annual capital distribution in the history of the Cambridge Associates benchmark, while investors in VC funds received their second largest payout since 2000.

The Cambridge Associates LLC U.S. Private Equity Index® rose 20.6% during 2013, while the Cambridge Associates LLC U.S. Venture Capital Index® rose 27.2%, its best annual performance in 15 years. For the fourth quarter, the private equity and venture capital indices returned 6.7% and 11.9%, respectively, with the latter outperforming the public equity markets. See the table below for comparisons of the Cambridge benchmarks against several key public market indices. Returns for periods of one year and longer are annualized.

U.S. Private Equity and Venture Capital Index Returns (%)
Periods ending December 31, 2013



----------------------------------------------------------------------------
    For the periods ending            1    3     5     10    15    20    25
       December 31, 2013       Qtr. Year Years Years Years Years Years Years
----------------------------------------------------------------------------
     CA US Private Equity       6.7 20.6  14.9  15.8  14.0  12.1  13.6  13.6
----------------------------------------------------------------------------
     CA US Venture Capital     11.9 27.2  15.4  12.5   9.7  22.6  30.8  20.7
----------------------------------------------------------------------------
                                Other Indices
----------------------------------------------------------------------------
             DJIA              10.2 29.7  15.7  16.7   7.4   6.5  10.2  11.2
----------------------------------------------------------------------------
       NASDAQ Composite*       10.7 38.3  16.3  21.5   7.6   4.4   8.8  10.0
----------------------------------------------------------------------------
    Russell 2000 Composite      8.7 38.8  15.7  20.1   9.1   8.4   9.3  10.2
----------------------------------------------------------------------------
            S&P 500            10.5 32.4  16.2  17.9   7.4   4.7   9.2  10.3
----------------------------------------------------------------------------


Sources: Cambridge Associates LLC, Dow Jones & Company, Inc., Frank Russell Company, Standard and Poor's, and Thomson Datastream.
* Capital Changes Only

Both benchmarks continued to outperform public companies over longer time horizons -- and in the case of the VC index, significantly.

Private Equity

All of the Key Sectors in the PE Benchmark had Positive Returns for both the Quarter and the Year

Strong returns from investments in financial services companies, one of the PE index's largest sectors, were a major driver in the private equity benchmark's performance in 2013. The sector represented roughly 10% of the index's value by weight but returned 14.4% for the quarter and 33.5% for the year. All eight of the meaningfully sized sectors in the index (those comprising at least 5% of its value) also had positive returns for both the quarter and the year. The three largest -- consumer, energy and healthcare -- represented more than half of the index's total value and returned between 6.7% and 8.8%.

Information technology (IT) just edged out financial services for the best major sector performance of the year, earning 33.6%. Energy had the lowest performance among the eight key sectors for both the quarter and the year, returning 6.7% and 18.3%, respectively.

PE Index's Largest Vintage was also Q4's Best Performer

Vintage year performances in the fourth quarter were strong across most of the index, with every vintage from 1998 through 2013 benefiting from healthy increases in their portfolio company valuations. The five largest vintages, 2004 to 2008, saw a combined $36 billion improvement in asset values for the period. On December 31, these five vintage years represented almost 80% of the PE index's value.

The largest vintage year in the PE index was 2007, and it was also Q4's best performer, earning 7.6% for the period. At year's end it represented 27.6% of the index, which, because the index is capital weighted, made the 2007 vintage the single largest driver of the index's quarterly performance. For the year, funds launched in 2007 returned 23.1%, which was second among the five largest vintages, falling just short of the 2005 vintage year's 23.3% increase. Funds launched in 2004 had the lowest return among the key vintages for the quarter: 3.0%; for the year, the 2006 vintage's 18.2% return was the lowest.

PE Index Hit a New Record for Annual Distributions in 2013

Fund managers in the PE benchmark called and distributed more capital to their limited partners (LPs) in Q4 than they did in the previous quarter. Calls were up 7.3% to $16.4 billion, while distributions made a huge jump of 31% to $41.6 billion, which in dollar terms was the second highest quarterly increase in the 28 years that Cambridge Associates has tracked the index. Q4 was the eighth consecutive quarter in which distributions outstripped contributions.

For the year, fund managers drew down $56.3 billion from their LPs, which was roughly $15 billion and $20 billion less than in 2012 and 2011, respectively. Annual distributions, however, hit an all-time high for the index in 2013. Fund managers returned $134.6 billion to their LPs for the year -- the largest amount since the index's inception.

"The outsized distribution from the PE index's fund managers in 2013 was made possible by both friendly credit markets and bullish public equities. Both of these factors made exits and recapitalizations easier, ultimately to the benefit of PE fund investors," said Keirsten Lawton, Managing Director and Co-Head of US Private Equity Research at Cambridge Associates.

Venture Capital

IT Sector was the Top Performer in VC Benchmark for Q4 and all of 2013

The performance of IT companies was the principal driver of the VC benchmark's quarterly and annual returns, the latter of which was the best in 15 years. The index's largest sector at year's end, accounting for 34.4% of the index's value, IT rose 21.8% for the fourth quarter and 40.8% for the year. The index remained highly concentrated by sector, with only four sectors, including IT, representing at least 5.0% of the index. In addition to IT, the other key sectors were health care, media and communications, and software.

While health care was the second largest sector by weight in the index, it had the lowest return for the quarter and year among the key sectors: 7.9% and 32.3%, respectively.

Annual Returns for All 7 Key Vintage Years in the VC Index were in Double Digits

By far the top performing vintage year among the seven significantly sized vintages in the VC index -- for both the quarter and the year -- was the 2010 vintage. Though representing only 8.2% of the index's value, funds launched in 2010 rose 32.1% for the quarter and 56.1% for the calendar year, giving the vintage a larger than usual impact on the index's performance relative to the vintage's size. The 2007 vintage, the largest in the index, turned in the second strongest performance of the key vintages for both the quarter and the year, rising 19.5% and 39.1% for the periods, respectively.

Funds launched in 2005 had the lowest return among the top seven vintages for the quarter -- just 1.9%; the 2000 vintage year funds had 2013's lowest total, 11.9%.

Capital Calls and Distributions in the VC Index were Up in Q4 but Down for the Year

In the fourth quarter, fund managers called just under $3.5 billion from their LPs and distributed $6.5 billion, making Q4 the eighth consecutive quarter in which distributions outnumbered contributions. Quarterly contributions were up 12.2% from Q3, while distributions were up a much smaller 1.7%. Investors in the 2000 and 2006 vintage years together received 31% of the total distributions for the quarter -- more than $800 million each.

For the year, calls and distributions in the index were both down. Contributions dropped 10.0% from 2012 to $12.8 billion; distributions fell 3.6% to $21.5 billion.

"Even with the drop in capital distributions from 2012, annual distributions in 2013 were still the fourth highest annual total in the history of the index, behind only 2012 and the bubble years of 1999 and 2000," said Peter Mooradian, Managing Director, Private Growth Research at Cambridge Associates.

For more details on the Q4 and 2013 performance of the Cambridge Associates US private equity and venture capital benchmarks, go to http://40926u2govf9kuqen1ndit018su.wpengine.netdna-cdn.com/wp-content/uploads/2014/07/US-PE-VC-Benchmark-Commentary-4Q13.pdf.

About Cambridge Associates and the Indices

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 nearly 1,000 global investors and delivers a range of services, including investment consulting, outsourced investment solutions, research and tools (Research Navigatorsm and Benchmark Calculator), and performance monitoring, across asset classes. The firm compiles the performance results for more than 5,600 private partnerships and their nearly 70,000 portfolio company investments to publish its proprietary private investments benchmarks, of which the Cambridge Associates LLC U.S. Venture Capital Index® and Cambridge Associates LLC U.S. Private Equity Index® are widely considered to be among the standard benchmark statistics for these asset classes. Cambridge Associates has more than 1,100 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 www.cambridgeassociates.com.

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 African Private Equity and Venture Capital Association (AVCA); the Asia Pacific Real Estate Association (APREA); Australian Private Equity & Venture Capital Association Limited (AVCAL); Canada's Venture Capital and Private Equity Association (CVCA); the Hong Kong Venture Capital and Private Equity Association (HKVCA); the Indian Private Equity and Venture Capital Association (IVCA); Institutional Limited Partners Association (ILPA); the Latin American Private Equity and Venture Capital Association (LAVCA); the National Venture Capital Association (NVCA); and the New Zealand Private Equity & Venture Capital Association Inc. (NZVCA). Cambridge Associates also provides data and analysis to the Emerging Markets Private Equity Association (EMPEA).

Both the Cambridge Associates LLC U.S. Private Equity Index® and the Cambridge Associates LLC U.S. Venture Capital Index® are reported each week in Barron's Market Laboratory section. In addition, complete historical data can be found on Standard & Poor's Micropal products and on our website, www.cambridgeassociates.com.

Inquiries about these indices should be addressed to: Frank Lentini at Sommerfield Communications, 55 Broad Street, 20th Floor, New York, NY 10004; 212.255.8386; (fax) 212.255.8459; [email protected].

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
ElasticBox, the agile application delivery manager, announced freely available public boxes for the DevOps community. ElasticBox works with enterprises to help them deploy any application to any cloud. Public boxes are curated reference boxes that represent some of the most popular applications and tools for orchestrating deployments at scale. Boxes are an adaptive way to represent reusable infrastructure as components of code. Boxes contain scripts, variables, and metadata to automate proces...
In his session at @ThingsExpo, Lee Williams, a producer of the first smartphones and tablets, will talk about how he is now applying his experience in mobile technology to the design and development of the next generation of Environmental and Sustainability Services at ETwater. He will explain how M2M controllers work through wirelessly connected remote controls; and specifically delve into a retrofit option that reverse-engineers control codes of existing conventional controller systems so the...
To support developers and operations professionals in their push to implement DevOps principles for their infrastructure environments, ProfitBricks, a provider of cloud infrastructure, is adding support for DevOps tools Ansible and Chef. Ansible is a platform for configuring and managing data center infrastructure that combines multi-node software deployment, ad hoc task execution, and configuration management, and is used by DevOps professionals as they use its playbooks functionality to autom...
The 3rd International WebRTC Summit, to be held Nov. 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA, announces that its Call for Papers is now open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 15th International Cloud Expo, 6th International Big Data Expo, 3rd International DevOps Summit and 2nd Internet of @ThingsExpo. WebRTC (Web-based Real-Time Com...
It’s been proven time and time again that in tech, diversity drives greater innovation, better team productivity and greater profits and market share. So what can we do in our DevOps teams to embrace diversity and help transform the culture of development and operations into a true “DevOps” team? In her session at DevOps Summit, Stefana Muller, Director, Product Management – Continuous Delivery at CA Technologies, answered that question citing examples, showing how to create opportunities for ...
Puppet Labs has announced the next major update to its flagship product: Puppet Enterprise 2015.2. This release includes new features providing DevOps teams with clarity, simplicity and additional management capabilities, including an all-new user interface, an interactive graph for visualizing infrastructure code, a new unified agent and broader infrastructure support.
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies leverage disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 17th Cloud Expo, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advance...
Skeuomorphism usually means retaining existing design cues in something new that doesn’t actually need them. However, the concept of skeuomorphism can be thought of as relating more broadly to applying existing patterns to new technologies that, in fact, cry out for new approaches. In his session at DevOps Summit, Gordon Haff, Senior Cloud Strategy Marketing and Evangelism Manager at Red Hat, discussed why containers should be paired with new architectural practices such as microservices rathe...
IBM’s Blue Box Cloud, powered by OpenStack, is now available in any of IBM’s globally integrated cloud data centers running SoftLayer infrastructure. Less than 90 days after its acquisition of Blue Box, IBM has integrated its Blue Box Cloud Dedicated private-cloud-as-a-service into its broader portfolio of OpenStack® based solutions. The announcement, made today at the OpenStack Silicon Valley event, further highlights IBM’s continued support to deliver OpenStack solutions across all cloud depl...
Puppet Labs is pleased to share the findings from our 2015 State of DevOps Survey. We have deepened our understanding of how DevOps enables IT performance and organizational performance, based on responses from more than 20,000 technical professionals we’ve surveyed over the past four years. The 2015 State of DevOps Report reveals high-performing IT organizations deploy 30x more frequently with 200x shorter lead times. They have 60x fewer failures and recover 168x faster
SYS-CON Events announced today that IceWarp will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. IceWarp, the leader of cloud and on-premise messaging, delivers secured email, chat, documents, conferencing and collaboration to today's mobile workforce, all in one unified interface
Containers are not new, but renewed commitments to performance, flexibility, and agility have propelled them to the top of the agenda today. By working without the need for virtualization and its overhead, containers are seen as the perfect way to deploy apps and services across multiple clouds. Containers can handle anything from file types to operating systems and services, including microservices. What are microservices? Unlike what the name implies, microservices are not necessarily small,...
All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo, November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Learn what is going on, contribute to the discussions, and e...
This Enterprise Strategy Group lab validation report of the NEC Express5800/R320 server with Intel® Xeon® processor presents the benefits of 99.999% uptime NEC fault-tolerant servers that lower overall virtualized server total cost of ownership. This report also includes survey data on the significant costs associated with system outages impacting enterprise and web applications. Click Here to Download Report Now!
SYS-CON Events announced today that G2G3 will exhibit at SYS-CON's @DevOpsSummit Silicon Valley, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Based on a collective appreciation for user experience, design, and technology, G2G3 is uniquely qualified and motivated to redefine how organizations and people engage in an increasingly digital world.