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Bailey McCann, Opalesque New York: While the S&P 500 plummeted in the first three quarters of 2022, a handful of private markets strategies surprised investors with their resilience. Asset classes like secondaries and real estate buoyed overall private capital returns through Q2 2022, according to a new report from PitchBook.
Across all private capital asset classes, the one -year horizon IRR thorugh Q2 2022 was 12.0%, a significant decline that fell below annualized 3-year, 5-year, and 10- year IRRs. It was also significantly down from one-year IRRs dating from Q4 2020 through Q1 2022, which ranged between 26.3% to 43.1%, PitchBook data shows.
Real estate was one of the only bright spots returning 24.4%.
Secondaries also did well. Secondaries generated a rolling one-year IRR figure of 21.7% through Q2 2022 and outperformed the overall private capital fund universe by a 9.7% margin, according to PitchBook data.
The report notes that "preliminary Q3 2022 returns look grim," and there are indications that both private equity and venture capital are headed into negative territory, which would drag down quarterly returns further.
Private equity fund performance for the second quarter posted negative returns of -2.4%. PitchBook says its preliminary estimate for Q3 IRR 2022 is -0.6%. The report notes that on a relative basis these negative returns don't look as bad as what investors saw in listed equities and bonds, but because private fund dat...................... To view our full article Click here
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