After earning nearly identical returns in fourth quarter 2016, in USD terms, the Cambridge Associates LLC Global ex US Developed Markets Private Equity and Venture Capital Index and the Cambridge Associates LLC Emerging Markets Private Equity and Venture Capital Index produced similar results again in first quarter 2017 (4.2% and 4.0%, respectively).
Private credit offers distinct advantages and appeal in a low return environment, but investors should be aware that behind the name is a diverse array of strategies, some more familiar to institutional investors than others, each with idiosyncratic risks. In this report, we describe the broad array of private credit strategies and position them along the risk/return spectrum, review the investment process, discuss expectations for the performance of these strategies in various parts of the economic cycle, and highlight some key risks for investors to consider.
The Cambridge Associates LLC US Private Equity Index® returned 3.9%, slightly lower than its fourth quarter performance. Rebounding from a tough fourth quarter, the Cambridge Associates LLC US Venture Capital Index® returned 3.3%.
In USD terms, the Cambridge Associates LLC benchmark indexes for global ex US developed and emerging markets private equity and venture capital (PE/VC) produced nearly identical results in fourth quarter 2016 (0.9% and 0.8%, respectively), but for the year the developed markets index earned a significantly better return (11.7% versus 4.6%).
Investors seeking to gain initial exposure to private investments should actively consider secondaries, rather than funds-of-funds, as the very first step to constructing a long-term private equity portfolio.
Equity markets outperformed other asset classes, while monetary policy expectations continued to negatively impact bond markets during the fiscal year ending June 30, 2017. This brief chart book looks at returns and other market metrics for fiscal year 2017.
Calendar year 2016 results for the Cambridge Associates LLC benchmark indexes for US private equity and US venture capital dramatically diverged: the private equity index had its best year since 2013 and the venture capital benchmark had its worst year since 2008.
April’s publication summarizes three articles on private investments. The first argues energy private equity funds offer more upside potential in the long term than either energy commodities or energy equities; the second finds that buyouts in Germany, Austria, and Switzerland outperform a constructed public market benchmark; and the third highlights a new technique to benchmark private equity programs.
New private infrastructure fund investors can find value in carefully evaluated managers and strategies, but they should ratchet down return expectations relative to years past.
No. If the interest expense deduction is eliminated, debt issuance may drop slightly, but the demand for senior and mezzanine debt will be little changed, and the risk/reward proposition is still attractive for investors.