European private equity returns have dropped in the opening half of 2008 according to preliminary figures released by Thomson Reuters.
The statistics – which are on a pooled average basis – show that the industry as a whole returned 11.3%, net of management fees and carried interest, up to June 30, compared to the 11.8% recorded for the second half of 2007.
Buyout funds returned 15.5% in H1, down from 16.3% from the previous six months, and venture capital generated 3.6%, a decrease from 4.5%.
Top quarter funds produced slightly lower pooled IRRs across venture capital with respect to December 2007 figures, except for development VC funds, which showed an increase to18.2% from 17.3%. Balanced funds showed the steepest drop to 15.8% from 19.9% in December 2007.
Another decline was seen in the preliminary 10-year investment horizon return figures. The industry overall fell, and whilst both buyout and venture funds registered positive 10-year returns of 14.8% and 0.9%, respectively, these figures were lower than in December 2007 (16.7% for buyouts and 1.7% for venture).