Private Equity (PE) Performance Around the World

Abstract

This paper looks at the performance of LPX Private Equity indices as proxy for Private Equity (PE) performance in North America, Europe, UK and the World and compares them to their respective regional stock and bond indices from January 1999 – December 2016. PE has outperformed stocks and bonds in all regions with much higher returns. However, PE also had higher risk compared to stocks and bonds in all regions. On a risk-adjusted basis (Sharpe, Sortino & Omega Ratios), PE has outperformed stocks in all regions of the world. However, PE underperformed bonds in North America, but outperformed bonds in UK and Europe on a risk-adjusted basis. PE also created much higher wealth compared to other asset classes. Overall, results indicate that PE has created tremendous value for their investors.