The State Street Global Exchange® Private Equity Index (GXPEI)
posted its second highest quarterly return of the past two years at
3.99 percent in the second quarter of 2018. The venture capital
category held its lead for the second quarter in a row with a 4.64
percent gain, followed closely by buyout funds with a 4.18 percent
return; but private debt lagged behind with a 1.90 percent return
for the quarter.
The PEI is based on directly-sourced limited partnership data
and represents more than $2.8 trillion in private equity
investments, with more than 2,900 unique private equity
partnerships, as of June 30, 2018.
“Overall the second quarter of 2018 has seen a good recovery
from the volatile first quarter. However, the growth is not
universal across the index,” said Will Kinlaw, global head of State
Street Associates®, a division of State Street Global Exchange. "In
particular, information technology and energy sectors stand out
from the crowd, largely benefiting the venture capitalist and
energy-focused funds. Although private debt funds show a below
average return this quarter, their fund raising activity has been
particularly strong in 2018. To date, they have raised almost the
same amount of capital in the first two quarters of this year as
they did in all of 2017.”
“The US dollar appreciated against major currencies, including
the euro in the second quarter, partially due to rising interest
rates and good economic data,” said Anthony Catino, managing
director, Alternative Investment Solutions for State Street. “This
contributed to a lower US dollar denominated return than euro
denominated return for the Europe focused funds. Time will tell the
overall impact of the dollar’s stability on FX returns as we head
towards the end of 2018.”
Second Quarter Highlights Include:
- Venture capital funds led the three
main private equity strategies (Venture Capital, Buyout, and
Private Debt) for the second quarter in a row.
- The 4.64% return was the highest for
venture capital funds since Q4 2014
- Private debt was the only strategy to
see a decrease in returns, dropping to 1.90% from 2.46% in Q1,
posting the lowest returns for that strategy since Q1 2016.
- Buyout funds returned 4.18% for the
quarter, up from 2.09% in Q1, and the venture capital fund return
of 4.64% was up from 3.78% in Q1.
- Q2 2018 saw the US dollar appreciate
5.34% against the euro, and general USD appreciation against world
currencies.
- European-focused private equity funds
experienced a 3.12% quarterly gain in USD-denominated terms (8.61%
in EUR-denominated IRR).
- In USD denominated terms, US focused
funds returned 4.70% for the quarter, while the rest of the world
returned 1.66%.
- Among sectors, information technology
funds led for the second straight quarter with a 7.05% quarterly
return, up from 5.20% in Q1. They were followed by energy funds
with a 4.62% quarterly return, rebounding from 0.62% in the
previous quarter, and health care funds with a 4.24% quarterly
return. Financials were the only sector to see a decrease in
returns, generating 1.69% compared to 4.93% in Q1.
For additional insights, or to learn more about the GX Private
Equity Index please visit, http://www.ssgx.com/peindex.
Index returns reflect capital gains and losses, income, and the
reinvestment of dividends.
It is not possible to invest directly in an index. Index
performance does not reflect charges and expenses associated with
the fund or brokerage commissions associated with buying and
selling a fund.
Index performance is not meant to represent that of any
particular fund.
About State Street Corporation
State Street Corporation (NYSE: STT) is one of the world's
leading providers of financial services to institutional investors,
including investment servicing, investment management and
investment research and trading. With $33.99 trillion in assets
under custody and administration and $2.81 trillion* in assets
under management as of September 30, 2018, State Street operates in
more than 100 geographic markets worldwide, including the US,
Canada, Europe, the Middle East and Asia. For more information,
visit State Street’s website at www.statestreet.com.
*This figure is presented as of September 30, 2018 and includes
approximately $28 billion of assets with respect to SPDR products
for which State Street Global Advisors Funds Distributors, LLC
(SSGA FD) acts solely as the marketing agent. SSGA FD and State
Street Global Advisors are affiliated.
Marketing Communication
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02111-2900
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State Street CorporationKerri Doherty, +1 617 664
1898KCDoherty@statestreet.com@StateStreet
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