Returns for secondaries fell year-on-year in the first quarter of 2016, amid an overall drop for all strategies.
Pooled net internal rates of return for quarterly, yearly, three-year, five-year and 10-year comparisons for the ILPA Secondaries Benchmark were all down, according to data from the Institutional Limited Partners Association released in August.
Returns also fell across most time periods when compared with the fourth quarter of 2015.
Secondaries performed best across a three-year period, delivering a 10.79 percent return. This was still lower than 10.84 percent on a quarterly comparison and 11.71 percent compared with a year earlier.
There was a “marked slowdown” in secondaries deal volume in the first quarter due to global market volatility, according to a July report by Credit Suisse. With steeper discounts for funds stakes, buyers were using structuring to generate better returns amid continued bifurcation in the market, Mark McDonald, head of Europe and EMEA secondaries advisory in the bank’s private fund group, told Secondaries Investor.
Average returns for all strategies fell both on quarterly and yearly comparisons, based on the ILPA All Funds Index.
US and Canadian venture capital delivered the highest returns with 18.81 percent across a three-year period, up from a year earlier.
Natural resources remained the worst performing strategy, with a negative 18.49 percent return across one-year period.
The ILPA data is based on returns for 3,512 funds as of 31 March.
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