Private Equity Posts Positive Finish to ‘09

May 24, 2010 ( - For the quarter ended December 31, 2009, the State Street Private Equity Index posted a 5.94% quarterly return.

A press release said this is a slight increase from the third quarter return and 2,226 basis points higher than the return recorded in the fourth quarter of 2008.    

From 2008 to 2009, all Private Equity sectors posted a 15% one-year end-to-end return, after five consecutive quarters of negative returns. State Street noted that Mezzanine and Distressed Debt funds recorded 35.3% return for one-year investment time period.   

The since inception Internal Rate of Return (IRR) as of the fourth quarter of 2009 was 11.42%, an increase of 139 basis points from the prior quarter. The European and the Rest of World regions were 14.91% and 5.09%, respectively, with the latter showing an increase ofmore than 250 basis points from the prior quarter.  

“Over the course of 2009, we witnessed fewer deals and a drop in fund raising activity in the Private Equity industry,” said Bill Pryor, senior vice president of State Street Investment Analytics, in the announcement.  “However, Private Equity has since made a major comeback in the second half of 2009, finishing the year with all major fund categories posting positive returns over one-, three-, and five-year time horizons.”  

The index is based on the latest quarterly statistics from State Street Investment Analytics’ Private Edge Group and includes 1,717 private equity partnerships with a total fund size of $1.6 trillion.