Record Year for Private Equity Distributions

August 18, 2014 at 10:34 PM
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Private equity investors received $568 billion in capital distributions last year, according to a report released August 14 by Preqin, which provides research on alternative investments.

The 2013 distributions, the highest annual amount ever recorded, compared with $381 billion of distributions in 2012.

Preqin's research showed that last year's distributions also surpassed capital calls by 46%, a record margin, following several post-crisis years when capital calls generally far outstripped capital returned to investors.

"The public equity market and general exit environment have created good conditions for private equity firms to sell assets, particularly companies bought at a discount in the period after the financial crash," Christopher Elvin, Preqin's head of private equity products, said in a statement.

"Preqin has witnessed positive momentum in the fundraising market carry over into 2014. With investor sentiment generally positive towards their private equity portfolios, it is likely many of these investors will be returning a proportion of those distributions back into re-ups or new investments."

The report included these other key findings:

  • Global private equity assets under management stood at $3.7 trillion as of December 2013, up 14% from the end of 2012

  • Distributions in 2013 represented 15% of total industry assets under management, slightly below the highs of 17% seen in 2004 and 2005
  • Private equity funds produced 18% returns on average for the one-year period to December 2013
  • Over a 10-year period, private equity funds have produced median net IRRs (internal rates of return) of 20%
  • In 2013, private equity firms realized 1,456 buyout investments worldwide, valued at an aggregate $322 billion, compared with 1,360 valued at $289 billion in 2012
  • Venture capital fund managers in 2013 realized 880 investments at a value of $72 billion, up from 847 in 2012 valued at $64 billion

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