GLOBAL - Private equity funds have recovered from some of the heaviest losses of the global downturn, research has shown.
Analysis of 5,000 funds worldwide by data provider Preqin found valuations increased 13.5% in 2009, almost erasing the losses of in 2008 which saw net asset values drop 15.8%.
Although Q1 2010 data will not be published until later this year, Preqin said there are indications the recovery has remained on track.
"Company valuations and performance started to improve from the second quarter of 2009 and the industry has since continued its recovery," said Preqin head of research Etienne Paresys.
The survey recorded returns of 13.8% in the 12 months to the end of December 2009, compared with losses of 9.2% over the year to September 30 2009.
Performance still trailed the major markets over the same period however, with the US S&P 500 up 26.5%, the MSCI Europe rising 35.8% and MSCI Emerging Markets index up a whopping 78.5%, however Preqin said.
Within the asset class, buyout funds posted the highest returns last year, returning 16.7%, with venture capital up 5%, mezzanine by 2.3% and fund of funds 0.2% higher.
The data also showed median returns for 2005 vintage and older buyout funds are now all in positive territory, while 2006 vintage and subsequent median returns are still in the red.
"Although the 2006 buyout vintage was heavily affected by the global downturn and is still showing negative median returns, we have seen a significant improvement in performance, and there is now a strong possibility that it will move into positive territory in the coming months," Paresys added.
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