The Returns of Private Equity Funds: A Swiss Perspective

Abstract

The author presents private equity fund returns in absolute terms and relative to the public market. The study is based on a unique, hand-collected dataset containing 531 private equity funds and 25,130 cash flow data points, representing 45% of Swiss pension funds’ private equity investments. Analysis shows a cross-sectional mean internal rate of return of 9% for direct private equity funds, 18% for buyout funds, –4% for venture funds, and 12% for funds of funds. Furthermore, private equity funds have outperformed broader public market indexes by 9% to 19% over the lifetime of a fund, with buyout funds being the best performing subgroup.

TOPICS: Private equity, developed, performance measurement, statistical methods