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What's Wrong With Trumka's Op-Ed

    In a recent op-ed in The Wall Street Journal, AFL-CIO President Richard L. Trumka mischaracterizes private equity’s record in creating jobs, strengthening companies and benefiting workers.


    Read the truth about private equity investment

    Private Equity and returns

    1) The total net profits distributed to investors worldwide by private equity funds raised since inception through 2007 were $1.12 trillion.

    2) Despite declines related to the economic crisis, private equity performance through the third quarter of 2008 surpassed the performance of public equity markets. Five-year private equity returns were highest with an annualized rate of 12.2 percent. One year performance for private equity in the period ending September 30, 2008 was -8.2 percent, compared to -21.4 percent for the NASDAQ and -22 percent for the Standard and Poors 500 index.

    3) A review of 103 public pension funds across the U.S., Canada, the UK and Europe found that as of June 2008, private equity outperformed all other asset classes for the three- and five- year periods.

    4) Between 1980 and 2005, top-quartile private equity firms delivered average annualized net returns of 39 percent, significantly beating the S&P 500 and other public market indices. Those superior returns helped strengthen several major public pension funds and defined benefit programs.

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    Sources

    1) Preqin

    2) Thomson Reuters Private Equity Performance Index (PEPI)

    3) Preqin 2009 Global Private Equity Review

    4) PEC analysis of data from Venture Economics and Bloomberg