State Street Corporation (NYSE:STT) posted a 5.58% return, 207 basis points lower than the fourth quarter of 2010 return and 335 basis points higher than the return recorded during the year ago period, in the State Street Private Equity Index as of March 31.
The index is based on the latest quarterly statistics from State Streets Alternative Investment Solutions group and includes 1,961 private equity partnerships with a total fund size of $1.7 trillion.
In the first quarter of 2011, the returns for the Europe and Rest of World regions were 4.09% and 4.12%, respectively, reflecting a significant decrease from the previous quarter. In the US, the quarterly return was 6.11%, representing a slight decline from the prior quarter.
For the time period from April 1, 2010 to March 31, all Private Equity recorded a 22.6% one-year end-to-end return. Venture Capital posted an 18.7% return for the same one-year period, up from 13.9% for the January 1, 2010, to December 31, 2010, one-year period.
Buyout funds were the best performers among all three investment strategy sectors, recording a 23.8% return for the same time period. Mezzanine & Distressed Debt funds returned 20.6%, reflecting a slight decrease from prior time period.
All three major private equity strategies posted higher since inception return as of March 31. Buyout funds and Venture Capital recorded 13.3% and 10%, respectively. Distressed Debt and Mezzanine funds posted a 12.7% since inception return.
The first quarter of 2011 was the eighth consecutive quarter with positive quarter over quarter returns, which were driven primarily by recent robust distributions across all investment strategies, says Suresh Krishnamurthy, senior vice president at State Street. The highest level of distributions since the financial crisis in 2008 helped drive robust returns in the first quarter of 2011, indicating that the private equity index market has fully recovered.
(CM)