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Eastern Asia and Northern Europe regions achieve highest annual return for private equity

Friday, July 30, 2021
Opalesque Industry Update - The top-performing regions globally for private equity in 2020 were Eastern Asia and Northern Europe, with an annual return of 31.5% and 26.8% respectively, revealed eFront, which has released its Fourth Annual Global Private Equity Performance Series showing the top-performing regions globally for private equity in 2020.

In terms of individual countries, Japanese and Chinese deals recorded the best performance over the year, returning 38.3% and 34.4% respectively.

Northern Europe was the strongest performer on a risk-adjusted basis, returning 27% but with a low standard deviation of annual returns (74.5%).

During 2020, Finland and Germany recorded the most favorable annual return per unit of risk measured as standard deviation.

Investment-to-date performance analysis shows that regions diverge into two groups: a low risk, low return group including Western Europe and North America, and a high risk, high return one including APAC and Northern Europe.

Japan recorded the highest investment-to-date performance, with a MOIC of 2.07x and the most favorable risk-return profile among all the national markets.

China recorded an extreme dispersion in the gross MOICs of deals, driving its standard deviation to the highest value among all countries, signifying high risk, while Sweden has the lowest variation in the average deal multiple performance.

The IRR view confirms Northern Europe and Eastern Asia as the top performers. These two regions, as well as South East Asia and Oceania, exceed 20% annualized IRR performance, gross-of-fees.

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