venture capital or private equity funds Repeat as the most profitable investment product. According to the 2022 report prepared by the ‘big four’ EY together with the industry’s employer association SpainCap and Webcapitalriesgo, net annual return (net IRR) this type of vehicles remained at 11.3%This is slightly above the 11.2% recorded in 2021.
The profitability offered by these funds is much higher than that of other assets in the market: Triples the annual net return of Ibex-35This index, which was at 2.8% between 2006 and 2022, outperforms the Euro Stoxx 600 index, which groups Europe’s 600 largest companies by market value, which achieved a return of 6.5% in the same period.
In addition to indices, Returns on private equity far exceed other investment products: such as fixed income, hedge funds or real estate. According to the same study, the annual return on the 10-year Spanish bond is 2.9%. venture fund 3.4% and ‘brick’ 5.6%.
Returns up to 30%
Analyzing the performance of funds according to quarters, the half that offers the best returnsSix out of every ten Euros are invested in the private equity sector,They record returns between 14% and almost 32%. Only 17% of the money invested is achieved, with an average capital loss of 8.4%.
To separate them according to investment types; private equity And venture capital, the investment Provides lower returns in smaller or larger consolidated companies compared to other companies initiatives: 11% and 12.8% respectively. Regarding 2021 private equity It improves performance compared to . venture capital which reduces it. The change in monetary policy, along with the rise in interest rates, has affected newly established and growing companies more than those already established in the market.
In the second edition of this study, EY and SpainCap separately analyzed funds with ESG among their criteria. impact funds. They were detected in total 14 vehiclesThese funds, whose assets will reach 1,552 million Euros by the end of 2022, 14% net profitabilitysignificantly improving the market average.
16 vehicles that have reached the end of their life since 2006 has achieved 5.9% annual net return. This profitability is significantly lower than what they recorded in 2022, but these are funds that have been hurt by the economic context of the financial crisis. “However, the return on closed-end funds is higher than most other investment alternatives analyzed,” the report states.
Investment in private equity broke a historical record
Spanish private equity fund managersexceeding one hundred for the first time, They invested 14 billion 984 million euros in assetsthe highest figure since records began. EY Private Equity Strategy and Transactions partner Alfredo Salcedo said during the presentation of the report: “The volume of assets under management increased by 10% last year. There is market confidence in such assets.”
Pre-pandemic operations recovered in 2022: closed 594 operations worth 1,686 million EurosThere were 553 transactions and 1,350 million transactions in 2021. In case of liquidation, 216 transactions were recorded in 2022; this figure is 45 more than the previous year, but its value is 200 less than in 2021, almost 600 million.
An investment in private equity 0.7% impact on gross domestic product (GDP). This rate has more than doubled since 2006, the first year on record, when it represented only 0.3%. In Spain, the sector’s impact on GDP is slightly above the European Union average of 0.63%.