2009 european performance figures
DESCRIPTION
June 2010. 2009 European Performance Figures. Methodology for Performance Benchmarks. All calculations are done at the fund level by Thomson Reuters based on cash flows and NAVs reported by participating GPs Returns are net of management fees and carried interest - PowerPoint PPT PresentationTRANSCRIPT
2009 European Performance Figures
June 2010
2
Methodology for Performance Benchmarks
All calculations are done at the fund level by Thomson Reuters based on cash flows and NAVs reported by participating GPs
Returns are net of management fees and carried interest Returns are calculated with cash flows in Euros for European figures Cash flow database contains since its inception 1,375 European
independent funds, representing €313bn of committed capital
Definitions: Pooled IRR:
IRR of a group of funds where their cash flows have been aggregated together before IRR calculation
Investment Horizon Return: IRR calculated with Net Asset Value at beginning of period as capital outflow, Net Asset Value at end of period, and actual cash flows in between
3
Annualised net pooled IRR
European private equity funds formed 1980-2009
Stage No. of funds Pooled IRR Multiples Multiples (as % of TVPI)
DPI RVPI TVPI DPI RVPI
Early-stage 418 -1.3 0.38 0.57 0.95 40.0% 60.0%
Development 196 6.5 0.74 0.54 1.28 57.8% 42.2%
Balanced 164 2.1 0.52 0.57 1.09 47.7% 52.3%
All venture 778 1.6 0.51 0.56 1.07 47.7% 52.3%
Small buyout 289 12.5 1.14 0.40 1.54 74.0% 26.0%
Mid buyout 66 15.4 1.06 0.48 1.54 68.8% 31.2%
Large buyout 51 18.7 1.16 0.38 1.54 75.3% 24.7%
Mega buyout 52 8.4 0.69 0.52 1.21 57.0% 43.0%
All buyout 458 11.9 0.83 0.49 1.32 62.9% 37.1%
Generalist 139 9.1 1.02 0.39 1.41 72.3% 27.7%
All private equity
1,375 8.9 0.80 0.48 1.28 62.5% 37.5%
Source: Thomson Reuters
Annualised net pooled IRR from inception to 31-Dec-2009
4
Horizon IRRs by Stages
European private equity funds formed 1980-2009
Fund type 1-year 3-year 5-year 10-year
20-year
Early-stage -2.6 -4.7 -0.8 -3.5 -1.3
Development 11.5 0.7 3.3 1.4 6.9
Balanced -0.7 -3.0 1.5 -1.4 2.1
All venture 1.0 -3.1 0.8 -1.8 1.6
Buyout 7.2 -3.9 8.3 8.0 11.4
Generalist 36.9 -5.2 7.2 4.3 9.3
All private equity
7.7 -3.9 6.5 5.2 8.9
Source: Thomson Reuters
Investment Horizon Returns for period ending 31-Dec-2009
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Top-Quarter Performance
European top-quarter funds formed 1980-2009
Stage Sample size
Top-quarter
pooled IRR
*Overall upper
quartile IRR
Early-stage 104 12.0 1.0
Development 49 18.0 8.8
Balanced 41 13.5 5.5
All venture 196 13.6 3.3
Buyout 116 30.2 17.0
Generalist 35 22.9 7.7
All private equity
345 21.8 9.1
* Funds must equal or exceed this IRR to qualify as top-quarter funds.Source: Thomson Reuters
6
Top-Half Performance
European top-half funds formed 1980-2009
Stage Sample size
Top-half pooled IRR
**Overall median IRR
Early-stage 209 6.3 -3.8
Development 96 13.8 -0.5
Balanced 80 7.7 -0.9
All venture 390 9.1 -2.2
Buyout 229 19.8 6.2
Generalist 68 10.6 -0.1
All private equity
688 14.1 -0.4
** Funds must meet or exceed this IRR to qualify as top-half funds.Source: Thomson Reuters
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Performance Ranking
-19.4
-2.9
5.8
21.8
0%
25%
50%
75%
100%
Net pooled IRR for the quarter
Percentile
9.1
-0.4
-6.3
Net IRR for upper,median, lower quartile
Source: Thomson Reuters
Net IRR since inception per quarter
8
Top-Quarter Horizon IRRs
European top-quarter funds formed 1980-2009
Stage No. of funds
Pooled IRR
3-year 5-year 10-year
Early-stage 104 12.0 3.2 8.6 8.3
Development 49 18.0 11.0 15.5 14.1
Balanced 41 13.5 4.4 5.0 4.1
All venture 196 13.6 6.1 9.5 9.2
Buyout 116 30.2 13.2 32.7 22.5
Generalist 35 22.9 -3.2 41.1 26.9
All private equity
345 21.8 5.7 26.5 17.9
Source: Thomson Reuters
Annualised net pooled since inception and horizon IRR
9
Top-Half Horizon IRRs
European top-half funds formed 1980-2009
Stage No. of funds
Pooled IRR
3-year 5-year 10-year
Early-stage 209 6.3 -0.6 4.0 2.8
Development 96 13.8 7.4 10.5 9.8
Balanced 80 7.7 1.2 7.2 3.1
All venture 390 9.1 2.0 6.5 4.4
Buyout 229 19.8 6.3 24.4 15.5
Generalist 68 10.6 -5.8 10.0 6.1
All private equity
688 14.1 3.1 16.8 11.5
Source: Thomson Reuters
Annualised net pooled since inception and horizon IRR
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Buyout Returns by Fund Sizes
Source: Thomson Reuters
Short-, medium-, and long-term returns reflected by net horizon IRRs to 31 December 2009
These results refer to the fund size, not the deal size; while fund sizes are defined in USD, the returns are computed in EUR.
European Private Equity Funds formed 1980-2009
Fund size ($)
No. of funds
Pooled IRR
1-year 3-year 5-year 10-year
0-500m 355 13.6 5.3 0.7 8.0 7.4
500m-1bn 51 18.7 -9.1 -0.2 7.8 8.8
1bn+ 52 8.4 8.6 -5.7 8.5 8.1
All buyout
458 11.9 7.2 -3.9 8.3 8.0
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Venture Returns by Fund Sizes
European Private Equity Funds formed 1980-2009
Fund size ($)
No. of funds
Pooled IRR
1-year 3-year 5-year 10-year
0-50m 474 4.8 0.0 -3.2 2.0 1.0
50m-100m 143 0.2 3.3 -3.2 -0.3 -2.5
100m+ 161 0.5 0.9 -3.0 0.7 -2.6
All venture
778 1.6 1.0 -3.1 0.8 -1.8
Source: Thomson Reuters
Short-, medium-, and long-term returns reflected by net horizon IRRs to 31 December 2009
These results refer to the fund size, not the deal size; while fund sizes are defined in USD, the returns are computed in EUR.
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Performance by Vintage Years
Funds formed :
1980-1984 1985-1989 1990-1994 1995-1999 2000-2004 2005-2009
Fund size IRR DPI IRR DPI IRR DPI IRR DPI IRR DPI IRR DPI
Venture 6.3 1.64 8.3 1.55 11.8 1.50 1.6 0.62 -3.6 0.27 -1.2 0.07
Buyout 9.2 1.88 13.6 1.65 18.6 2.04 12.3 1.35 18.1 1.20 -9.0 0.11
Generalist 7.7 1.78 7.2 1.06 10.4 1.37 11.2 1.10 22.7 1.26 0.5 0.07
All private equity
6.8 1.69
8.6 1.20
16.7
1.88
9.9 1.19
12.6
1.02
-7.7 0.11
Source: Thomson Reuters
Annualised net pooled IRR by vintage years as of 31-Dec-2009
13
European 5-Year Rolling IRRs
-10
0
10
20
30
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
%
Venture Buyout Generalist
Source: Thomson Reuters
+7.2%+7.2%
+0.8%+0.8%
+8.3%+8.3%
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5-Year Rolling IRRs by Regions
Europe
-10
0
10
20
30
40
50
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
%
Venture Buyout
USA
-10
0
10
20
30
40
50
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
%
Venture Buyout
+0.8%+0.8%
+8.3%+8.3%
+4.3%+4.3%
+5.3%+5.3%
Source: Thomson Reuters
15
European Venture 3-,5-,10-Year Rolling IRRs
-15
-10
-5
0
5
10
15
20
25
30
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
%
3-Year IRR 5-Year IRR 10-Year IRR
Source: EVCA/Thomson Reuters
-1.8%-1.8%
-3.1%-3.1%
+0.8%+0.8%
16
European Buyouts 3-,5-,10-Year Rolling IRRs
-15
-10
-5
0
5
10
15
20
25
30
35
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
%
3-Year IRR 5-Year IRR 10-Year IRR
Source: EVCA/Thomson Reuters
+8.0%+8.0%
-3.9%-3.9%
+8.3%+8.3%
17
European Private Equity 3-,5-,10-Year Rolling IRRs
-15
-10
-5
0
5
10
15
20
25
30
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
%
3-Year IRR 5-Year IRR 10-Year IRR
Source: EVCA/Thomson Reuters
+5.2%+5.2%
-3.9%-3.9%
+6.5%+6.5%
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Comparators
Stage European Private Equity Return
JP Morgan Euro Bonds
HSBC Small Company
index
Morgan Stanley
Euro Index
Early-stage -1.3 9.6 6.4 -0.3
Development 6.5 9.5 8.1 4.4
Balanced 2.1 8.6 6.0 1.4
All venture 1.6 9.5 6.7 3.0
Buyout 11.9 10.2 7.2 -0.7
Generalist 9.1 9.9 6.7 5.6
All private equity
8.9 9.8 6.9 0.9
Source: Thomson Reuters
Annualised net pooled IRR from inception to 31-12-2009
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Comparators
-5
0
5
10
15
20
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
%
Morgan Stanley Euro Equity HSBC Small Company Equity JP Morgan Euro Bonds European Private Equity
+9.8%+9.8%
+0.9%+0.9%
+8.9%+8.9%
+6.9%+6.9%
*Comparators are Internal Rates of Return (IRR). IRRs for public market indices are calculated by investing the equivalent cash flows that were invested in private equity into the public market index. Then an equivalent IRR is calculated for each index. Calculations based on methodology proposed by J Coller and published by A Long and C Nickles.
Annualised net pooled IRRs from inception to 31-12-2009
Source: Thomson Reuters
20
Conclusions
§ Stable long-term return for private equity at 8.9%
§ Top-quarter private equity funds return 21.8%
§ Five-year returns remain strong at 6.5%
§ While three-year returns are impacted by the economic crisis, one-year returns are back into positive territory at 7.7%
§ Regional rankings remain unchanged (five-year horizon IRRs): European buyouts (8.3%), US buyouts (5.3%), US venture (4.3%) and European venture (0.8%)
§ The since-inception private equity net IRR outperformed the equity returns achieved by the public equity comparators (HSBC Small Company Index at 6.9% and Morgan Stanley Euro Index at 0.9%), and was slightly behind the return of JP Morgan Euro Bonds Index at 9.8%