Published by the National Association of Investment Companies
Diverse- and women-owned private equity firms continue to outperform their benchmarks despite a challenging business environment, according to a report released by the National Association of Investment Companies (NAIC). Updated and published biennially, Examining the Returns 2023: Further Evidence of Diverse-Owned Private Equity Firm Outperformance is the industry's only quantitative study that measures the performance of diverse- and women-owned private equity firms.
Key findings of Examining the Returns 2023 include:
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As in prior years, the NAIC Diverse Private Equity Index significantly outperformed the benchmark Burgiss median return, recording a net Internal Rate of Return (IRR) of 17.23 percent, a net Total Value to Paid In (TVPI) of 1.68x and Distributed to Paid-In Capital (DPI) of 0.66x compared with Burgiss median performance of 11.58 percent, 1.37x and 0.44x, respectively. This represents almost 600 basis points of outperformance from an IRR perspective.
Roughly 31 percent of the funds in the NAIC Private Equity Index produced top-quartile net IRRs during the period studied.
The NAIC Private Equity Index generated an IRR in the first or second quartile 72.2 percent of the time and posted a TVPI and DPI in the first or second quartile approximately 83 percent of the time.