Private equity returns in South Africa over a rolling three-year period increased for the third consecutive quarter to end 19.4% higher at the end of June, according to the latest SAVCA RisCura South African Private Equity Performance Report. This compares to a return of 19% at the end of March and 17% at the end of December 2011.
However, returns over a 10-year and five-year period continue to be dampened by high opening NAVs at the start of the period and low NAVs experienced during the global financial crises. Over a 10-year period to the end of June, returns were 17.2% compared to 18.2% at the end of the previous quarter in March and 23.1% at the end of December 2011. Returns over five years were 12.9% for the period to the end of June compared to 13.9% at the end of March and 20% at the end of December 2011.
The figures are based on rolling time periods, therefore the 10-year and five-year returns reflect opening NAVs from 2002 and 2007, respectively.
Rory Ord, head of RisCura Fundamentals, said: “The thing to note is the strong three-year performance, which has become apparent as the industry has recovered after the financial crisis. The three-year period now begins post crisis, so it is an interesting indication that the industry has begun to recover after some tough times, which are still reflected in the five-year and 10-year periods.”
Compared to the public markets, the asset class outperformed the FTSE/JSE All Share Index (ALSI) over all reported periods. Over 10 years it returned 17.2% versus a return of 14.4% for the ALSI, over five years it returned 12.9% versus the ALSI’s return of 5.5%, and over three years it returned 19.4% compared to 17.3% for the ALSI. It also outperformed the FTSE/JSE Shareholder Weighted Total Return Index (SWIX) and FTSE/JSE Financial Index (FINDI) over five years, returning 12.9% versus the SWIX return of 7.6% and FINDI return of 10.4%. Copyright. HedgeNews Africa – October 2012.
To view the full report click here.