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Alternative Market Briefing

Private equity returns beat publicly listed stocks again

Friday, February 25, 2022

Laxman Pai, Opalesque Asia:

2021 saw private equity's continued outperformance of public equity, generating an extra 83 cents per dollar invested since 2017, said a study.

Hamilton Lane's market overview for 2022 shows that private real estate and credit, with significantly lower risk profiles than equity strategies, have also done remarkably well in this environment.

In a longer-term picture of private equity's performance vis a vis public markets, the pooled average buyout returns have outperformed in every single one of the past 20 vintage years and by an average of more than 1,000 basis points. Private credit also outperformed in every vintage year over the last 20.

Growth in the opportunity set for the private markets, together with strong performance potential, has driven fundraising for private market funds to record levels, on pace for a 25% jump from 2020 to 2021.

Hamilton Lane identified a trend for 2022 dubbed the "15/15 club" - an estimation that at least 15 buyout managers are looking to raise $15 billion or more in the coming year.

Taking into account the fact that the managers may outpace their stated targets and the previous fund sizes of these managers, this number could top roughly $300 billion. This is a 50% increase from 2020 - the next best fundraising year for the top 15 funds - and the equivalent of 60% of buyout fundraising last year and 20% of all fundraising in 2021.

The report shows that the trend of increasing acces......................

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