December 2013

Private Equity Investments in Ex U.S. Developed and Emerging Markets Outperformed Their Public Market Counterparts in the Second Quarter, According to Cambridge Associates Benchmarks

While Funds in CA’s Emerging Markets Index Posted a Negative Return for the Period, Quarterly Distributions for the Benchmark Were at an All-Time High

BOSTON, MA (Dec 12, 2013) – Private equity and venture capital funds investing primarily in developed markets outside the U.S. posted a positive return for the second quarter and improved on their first-quarter performance.  Private equity investments in emerging markets had the opposite result, falling from a solid first-quarter to a slightly negative return for the period, according to global institutional investment advisor Cambridge Associates LLC (CA).

The Cambridge Associates LLC Global ex U.S. Developed Markets Private Equity and Venture Capital Index increased 2.4% in the period ending on June 30, 2013, as measured in U.S. dollars.  The results were helped by a stronger Euro during the quarter.  The Cambridge Associates LLC Emerging Markets Private Equity and Venture Capital Index dropped 0.4% over the same period.  For comparison, the MSCI EAFE index fell 1.0% during the quarter, and the MSCI Emerging Markets index dropped 8.0%.

The performance of the two Cambridge Associates benchmarks against comparable public equities indices over various time periods ending on June 30, 2013 is shown below.

Global ex U.S. Developed and Emerging Markets Private Equity  and Venture Capital Indices  Returns (%) in U.S. Dollars
Periods ending June 30, 2013

For the periods ending June 30, 2013


Year To Date







Ex-U.S. Developed Markets PE and VC









Emerging Markets  PE and VC









Public Market Indices










MSCI Emerging Markets









Sources:  Cambridge Associates LLC, MSCI Inc., Standard & Poor’s, and Thomson Reuters Datastream. MSCI data provided “as is” without any express or implied warranties.

Both private equity indices outperformed their public market counterparts in six of the eight time periods shown.  The developed markets index fell behind the MSCI EAFE only on shorter time horizons (the year-to-date and the one-year marks), while the emerging markets index lagged the MSCI Emerging Markets index only over two longer terms – the 10- and 15-year periods.

Q2 Highlights from the CA ex U.S. Global Developed Markets Index

The Two Largest Vintage Years were also the Top Two Performers

Only five vintage years in the developed markets benchmark represented at least 5% of the index’s value (significantly-sized).  Of these, funds raised in 2007, the second largest vintage, earned the quarter’s best return, 3.3%.  Funds raised in 2006, the largest vintage, earned the second highest return, 3.0%.  Together, the 2006 and 2007 funds represented almost 52% of the index’s value, making them by far the largest contributors to the index’s performance for the quarter.  The 2005 vintage year funds earned 1.3%, the lowest return among the top five vintages.

Capital Calls and Distributions both Increased over Q1

Fund managers in the developed markets index called $6.7 billion from their limited partners (LPs) in the second quarter, a 10.4% increase over the first quarter. LP contributions for the first six months of 2013, however, were the lowest for any six-month period since the second and third quarters of 2009.

Distributions for the second quarter were up sharply, to $12.7 billion, a 43.2% increase from the previous quarter’s total.  Four vintages – 2007, 2008, 2011, and 2012 – accounted for about 79% of the second quarter’s total distributions, as well as about 82% of its capital contributions.

Media Had the Highest Return among the Largest Sectors

Six of the seven significantly-sized sectors earned positive returns for the quarter.  Media companies did best as a sector, returning 7.9%, with healthcare a fairly close second, returning 7.4%.  The only negatively-performing sector was energy, which returned -0.2%.  Consumer companies represented almost 27% of the index’s value, which was by far the largest of any sector, and earned a collective return of 4.1%.

The U.K. Had the Top Return among the Largest Developed Markets

Five countries represented 62.4% of the index, with all but one (the U.S.) located in Western Europe.  Returns among the five ranged from a high of 7.6% for companies headquartered in the U.K. to a low of -1.3% for those having headquarters in Germany.  U.S.-based companies were the second-best performers in the index, earning a return of 4.3% for the quarter.

Q2 Highlights from the CA Emerging Markets Index

The emerging markets index remained concentrated along three dimensions in the second quarter: vintage year, sector, and geographical region.  Five vintage years represented 84% of the index’s value; companies in five sectors comprised just under 71% of the index; and businesses located in only four countries represented slightly over 54% of the index.

Performance among the Largest Vintage Years Was Mixed Of the five largest vintage years in the emerging markets index, two posted small positive gains in the second quarter, while the other three had similarly small losses.  The range from top to bottom was only 3.2%, with funds raised in 2006 returning 1.5%, the best in the group, and those raised in 2007 returning -1.7%, the lowest return among the five.  Increases in the valuations of healthcare companies were the main drivers of the 2006 vintage’s performance.  Write-downs in the consumer, financial services, and construction sectors hurt the 2007 vintage’s return.

Record-Setting Level of Distributions

As in the developed markets index, capital contributions and distributions both rose over the prior quarter.

“After falling more than 50% in the first quarter, contributions were up 75% to $3.4 billion.  Distributions increased dramatically as well, jumping 123% to $5.6 billion, the highest quarterly amount in the 27-year history of the emerging markets index.  This was also the second quarter in a row in which managers in the index distributed more capital than they called,” said CA Managing Director Miriam Schmitter.

Almost 60% of the total dollar amount of calls came from managers of funds raised in 2006, 2007, and 2008.  More than three-quarters of the capital distributions during the quarter went to limited partners of funds raised in vintage years 2005 and 2007.

Information Technology was the Top-performing Sector

Three of the five meaningfully-sized sectors in the emerging markets index had negative returns for the quarter: consumer, financial services, and manufacturing.  Of the three, financial services had the weakest performance, earning a -2.6% return.  Information technology and healthcare were the two largest sectors with positive returns, earning 6.4% and 4.5%, respectively.

Russia Returns to “Meaningfully Sized” Status

Only four countries represented more than 4% of the emerging markets index’s value. Companies headquartered in Mainland China continued to dominate the index, representing 34.7% of the benchmark’s value and earning 0.7% for the period.  India-based companies were a distant second, representing 9.0% of the benchmark and falling 4.6% for the period.  Rounding out the top four regions were Russia, which regained its designation as significantly-sized, and South Korea.  Both posted positive returns for the quarter: Russia earned 1.9%, the highest return of the four largest regions, while South Korea earned 1.6%, the second highest.

About the Indices

Cambridge Associates derives its Global ex U.S. Developed Markets Private Equity and Venture Capital Index from the financial information contained in its proprietary database of global ex U.S. private equity and venture capital funds. As of June 30, 2013, the database included 721 global ex U.S. developed markets private equity and venture capital funds formed from 1986 to 2013 with a value of about $265 billion.  Ten years ago, as of June 30, 2003, the benchmark index included 337 global ex-US developed markets funds, whose value was roughly $51 billion.

Cambridge Associates derives its Emerging Markets Private Equity and Venture Capital benchmark from the financial information contained in its proprietary database of global ex U.S. private equity and venture capital funds.  As of June 30, 2013, the database comprised 445 emerging markets funds formed from 1986 to 2013 with a value of about $105 billion.  Ten years ago, as of June 30, 2003, the benchmark index included 158 emerging markets funds, whose value was slightly less than $13 billion.

About Cambridge Associates

Founded in 1973, Cambridge Associates is a provider of independent investment advice and research to institutional investors and private clients worldwide. Today the firm serves over 950 global investors and delivers a range of services, including investment consulting, outsourced investment solutions, research and tools (Research Navigatorsm and Benchmark Calculator), and performance monitoring, across asset classes. The firm compiles the performance results for over 5,400 private partnerships and their more than 68,000 portfolio company investments to publish proprietary private investments benchmarks.  Cambridge Associates has more than 1,100 employees serving its client base globally and maintains offices in Arlington, VA; Boston; Dallas; Menlo Park, CA; London; Singapore; Sydney; and Beijing. Cambridge Associates consists of five global investment consulting affiliates that are all under common ownership and control. For more information about Cambridge Associates, please visit

Cambridge Associates has been selected to provide data and to develop and maintain customized industry benchmarks for a number of prominent industry associations, including the Institutional Limited Partners Association (ILPA), Australian Private Equity & Venture Capital Association Limited (AVCAL); the African Venture Capital Association (AVCA); the Hong Kong Venture Capital and Private Equity Association (HKVCA); the Indian Private Equity and Venture Capital Association (IVCA); the New Zealand Private Equity & Venture Capital Association Inc. (NZVCA); the Asia Pacific Real Estate Association (APREA); and the National Venture Capital Association (NVCA). Cambridge also provides data and analysis to the Emerging Markets Private Equity Association (EMPEA).

Media Contact

Frank Lentini
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