European private equity returns rebounded in 2010 with pooled IRRs net of management fees and carry coming in at 9.3 per cent, up on the 8.9 per cent recorded a year ago, according to the Thomson Reuters/EVCA 2010 European Performance Benchmark Study.
The study said that the improved environment for investments and exits, and easier access to debt financing, had boosted performance and had a positive effect on expected long-term returns.
For buyouts in Europe, funds smaller than $500m (€361m) outperformed larger funds on both a one-year and 20-year horizon. Overall buyout returns in Europe remain very strong, with 20-year horizons at 11.9 per cent compared with the US at 7.5 per cent.
Compared to public markets, private equity showed well, delivering superior returns to both the HSBC Smaller European Company Index and the Morgan Stanley Euro Equity Index, and very close to the JPMorgan EMBI+ Benchmark.