Slideshow: Long Term European PE performance Outperforms Public Markets

European private equity performance showed positive returns across all investment categories for the twenty year investment horizon for the period ending December 31, 2011, according to Thomson Reuters European Private Equity Performance Index (PEPI). Combined private equity returns outperformed the Morgan Stanley Euro Equity Index across every time horizon ending December 31, 2011, and outperformed the FTSE100 across all but the 3-year time horizon.

The Private Equity Performance Index is based on quarterly statistics from Thomson Reuters’ private Equity Performance Database analyzing the cash flows and returns for over 1,431 European venture capital and private equity partnerships with a capitalization of euro 354.3 billion.

The depressed debt and capital markets environment during the second half of 2011 dragged down returns in the shorter time horizons as exit activity was down, according to the report. One-year time horizons moved downwards, registering a 14.8 percentage point decrease from last year for venture capital funds (2.7%), and a 14.3 percentage point decrease for buyout funds (5.5%).

However, the longer-term 20-year time horizon was positive for venture capital funds with a slight increase from June last year from 1.2% to 1.5%. Balanced VC and later stage achieved double digit performance figures of 10% and 11% for the three year and one year time horizons respectively. In the buyouts category (which posted an 11.3% IRR in total in the 20-year time horizon) small, medium and large funds drove performance with double-digit performance figures of 11.4%, 17.5% and 11.6% respectively. Mega Buyouts managed a 4.1% IRR for the period, but did register double digit figures of 14.5% for the three year investment horizon.

Today’s slideshow takes a look at some of the top performers boosting these figures among the European buyout houses. Data is from CalPERS performance report for 30 September 2011. Permira and CVC are both prominent within the CalPERS European portfolio. The top seven European buyout performers are domestic European players, with an Italian-focused fund featuring in second place, a Polish vehicle in seventh place and two of the US giants making an appearance in eighth and tenth place. The top three of these European funds are also within the top ten performers of the CalPERS private equity portfolio for the period. Other top European performers, which are not CalPERs investee funds include UK-based Charterhouse Capital Partners VII which posted an IRR of 40.02% and investment multiple of 2x and Apax Europe V-A, which generated a 36.53% IRR and multiple of 2.1x, according to Washington State’s performance report as of 30 September, 2011.

[slideshow]

[slide title=” 10. Carlyle Europe Partners II, L.P. “]

Vintage: 2003

IRR: 21.7

Multiple: 1.7x

Total Value for CalPERS (Distributions+Value of Holdings): $108 million

[slide title=” 9. CVC European Equity Partners I, L.P.”]

Vintage: 1996

IRR: 23.1

Multiple: 2.7x

Total Value for CalPERS (Distributions+Value of Holdings): $129.6 million

[slide title=” 8. KKR European Fund I, L.P. “]

Vintage: 2001

IRR: 24.8

Multiple: 2.4x

Total Value for CalPERS (Distributions+Value of Holdings): $194.6 million

[slide title=” 7. Polish Enterprise Fund IV, L.P. “]

Vintage: 2000

IRR: 28

Multiple: 2.7x

Total Value for CalPERS (Distributions+Value of Holdings): $142.2 million

[slide title=” 6. Permira Europe III, L.P. “]

Vintage: 2004

IRR: 30.3

Multiple: 1.7x

Total Value for CalPERS (Distributions+Value of Holdings): $217.8 million

[slide title=” 5. Bridgepoint Europe II, L.P. “]

Vintage: 2001

IRR: 30.3

Multiple: 2x

Total Value for CalPERS (Distributions+Value of Holdings): $220.3 million

[slide title=” 4. Permira U.K. Venture III “]

Vintage: 1991

IRR: 31.1

Multiple: 2.8x

Total Value for CalPERS (Distributions+Value of Holdings): $37.4 million

[slide title=” 3. CVC European Equity Partners III, L.P. “]

Vintage: 2001

IRR: 41.8

Multiple: 3.00x

Total Value for CalPERS (Distributions+Value of Holdings): $567.9 million

[slide title=” 2. Clessidra Capital Partners “]

Vintage: 2005

IRR: 56.5

Multiple: 1.40x

Total Value for CalPERS (Distributions+Value of Holdings): $96.9 million

[slide title=” 1. Permira Europe I, L.P. “]

Vintage: 1997

IRR: 74.5

Multiple: 2.60x

Total Value for CalPERS (Distributions+Value of Holdings): $217.9 million

[/slideshow]

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