PRESS RELEASE
Paris, June 29, 2016
Performance of French private equity at year-end 2015
10% net returns per year over 10 years, stable long-term profitability
Outperforms all other asset classes
Strong performance of buyout capital at 13.7%
The Association Française des Investisseurs pour la Croissance (French private equity & venture
capital association - AFIC) and EY have published their annual report on the net performance of
French private equity firms at the end of 2015.
"Year after year, French private equity continues to offer very high returns and outperformed all other
asset classes again in 2015. French entrepreneurial talent coupled with patient capital and high-quality
support provided by AFIC's member funds enable good returns on French and international savings
invested in the productive economy. Our goal is to double the size of French private equity within five
years to help companies grow, while encouraging even more channeling of savings into this robust
asset class", says Olivier Millet, AFIC's Chairman.
"In an environment of very low, highly volatile returns, French private equity continues to show robust
and stable performance over the long term, reflecting the strength and quality of the companies that
receive support", states Bertrand Rambaud, director and Chairman of AFIC's Research and Statistics
committee.
CONTINUED VERY STRONG PERFORMANCE OVER THE LONG TERM
French private equity since inception, measured at end-2015, offered average returns of 10% net of
expenses per year, up from 9.8% at the end of 2014 on a like-for-like basis.
Over a 10-year horizon, average net performance was also 10% per year.
These figures reflect the very high long-term profitability of this asset class and stable performance.
OUTPERFORMING ALL OTHER ASSET CLASSES
French private equity again outperformed all other major asset classes over the long term, including
those with no risk, in an environment where returns have remained historically low for a long period
of time.
Over a 10-year horizon, the average annual return of 10% is double that of the listed equity markets
(4.0% for the CAC40i, 5.3% for the CAC All-Tradable - ex SBF 250).
The results were roughly the same compared with the bond and real estate markets, which recorded
growth of 5.1% and 6.0%, respectively.
Annual net returns over 10 years - Benchmark at end-2015
2006 - 2015
(Preqin performance at June 30, 2015)
10,0%
Sources: AFIC / EY - Preqin - Credit Suisse - Thomson Reuters
* Comparison performed using annual average returns for equity indices with dividends reinvested
6,0%
5,3% *
5,0%
5,1%
Hedge Funds
Fixed Income
4,0% *
Private equity
France
CAC 40 *
CAC All-Tradable
Real estate
PRIVATE EQUITY OUTPERFORMANCE ANALYSIS
According to Oliver Gottschalg, founder of the PERACS company, and under its partnership with AFIC,
French private equity over the decade has managed to produce an average annual alpha of 5.5%
compared with the CAC40 index. This alpha, which is defined as the annual outperformance of the
asset class compared with a benchmark equity index, provides a picture of the average
outperformance of private equity irrespective of market conditions.
PERFORMANCE BY SECTOR
Over a ten-year period, the average annual return of buyout capital remained robust at 13.7%.
Performances of buyout capital - medium and long-term
Net performance at end-2015
18,0%
IRR since inception
IRR over 10 years
2013 - 2015
2006 - 2015
13,7%
1987 - 2015
14,0%
IRR over 3 years
Over 10 years, the performance of venture capital has grown constantly, reaching 2.6% at the end of
2015 and 8.5% over a three-year horizon, while that of growth equity was consistently strong at 6.0%.
"The year 2015 confirms the good performance levels observed in recent years driven by the high return
of buyout capital, which stood at 14% at end-2015. Although over the long term French venture capital
remains low compared with other private equity sectors, it is important to note its robustness over the
past four years, in terms of both amounts invested and returns, with five-year performance of 5.7% and
three-year performance of 8.5%", explains Hervé Jauffret, Partner at EY.
The report on the net performance of French private equity firms has been published since 2004, for
12 years, under the direction of the Research and Statistics committee chaired by Bertrand Rambaud,
AFIC director and Chairman of SIPAREX. Through the association's Research Division, this committee
produces some 15 benchmark studies per year on the industry, including in particular on the activity
of French private equity firms, economic and social impact, net performance and value creation.
It also produces studies and information memoranda that support communication and lobbying
activities, participates in industry projects and initiatives and responds to individual requests for AFIC
members, the public authorities and the press.
The next report to be published in the fall of this year will be the half-year activity report, which will
present market trends in the first half of 2016.
ABOUT AFIC
AFIC encompasses nearly all private equity firms in France and has close to 290 active members. Through its role in the area of ethics, control
and development of industry practices, it is one of two associations recognized by the French financial markets authority (AMF) in which
membership is a condition for management companies to obtain authorization to operate. It is the only professional association specializing in
private equity.
AFIC's priorities include promoting the role and importance of private equity, actively contributing to its development by acting as a central
hub for the entire profession, and developing best practices, methods and tools for carrying out the function of shareholder in a professional
and responsible way.
For more information, please visit AFIC's website
ABOUT EY
EY | Audit | Advisory | Taxation & Law | Transactions
EY is a global leader in audit, advisory, tax, legal and transaction services. Worldwide, our expertise and the quality of our services create
conditions that foster trust in the economy and financial markets. We develop talented individuals so that together they can support
organizations on the path towards long-term growth. In this way, we play an active role in building a fairer, more balanced world for our
teams, our clients and society as a whole.
EY refers to the global organization and may refer to one or more members of Ernst & Young Global Limited, each of which is a separate
legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information
about our organization, please visit www.ey.com.
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PRESS CONTACTS
AFIC: Antoinette Darpy |Tel.: +33 (0)6.72.95.07.92 - [email protected]
EY: Amélie Fournier |Tel.: +33 (0)1.55.61.33.40 - [email protected]
i
The IRR (internal rate of return) of the CAC40 and CAC All-Tradable is calculated using the PME (Public Market Equivalent) methodology:
the reference method used to replicate inflows and outflows of private equity in a benchmark index. Based on a comparable investment
profile, the performance of private equity and equity indices are then calculated using portfolio values at the end of the period. The indices
are used with dividends reinvested.