Study shows diverse PE firms outperform benchmarks

According to a new study from the National Association of Investment Companies (NAIC), diverse- and women-owned firms delivered benchmark-beating returns in 2019. The research revealed that diverse private equity funds outperformed the Burgiss Median Quartile in 78.57% of the vintage years studied. The study, Examining the Returns 2019: The Financial Returns of Diverse Private Equity Firms, was authored by Meredith Jones, who leads the emerging manager research effort at Aon Hewitt Investment Consulting. The report is the industry’s only quantitative study measuring the performance of diverse-owned private equity firms, according the NAIC. Other key findings are that NAIC member firms produced higher distributed to paid-in (DPI) 64.29% of the time since 2000, and diverse private equity funds outperformed roughly 56.3% of all the vintage years available. Roughly 57% of the diverse funds produced top quartile performance in the 2011-2018 investment period. "This often-overlooked segment of private equity has a strong, proven history of surpassing the industry benchmarks," said Robert Greene, President & CEO of NAIC. "We hope that studies such as this will continue to shine a spotlight on the talent in the diverse investment manager marketplace and that institutional investors will take measurable steps to enhance allocations to these firms in order to better meet their actuarial commitments to their retirees." Despite delivering consistent returns, diverse- and women-owned firms collectively manage only 1.3 percent of the investment industry's $69 trillion in assets under management. NAIC's membership is comprised of more than 80 diverse-owned firms that collectively manage over $155 billion in institutional assets.

Study shows diverse PE firms outperform benchmarks

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