Looking at the 10-year annualized time weighted return, we see an overview of how specific strategies and asset classes have performed over the past decade. By leveraging Cobalt, we’re able to make assumptions about what asset class and/or sub- strategy can provide the strongest returns for a potential investment. This is especially helpful for clients who are looking to diversify their portfolios and commit capital to specific strategies. Scroll to see our key takeaways.
April 12, 2021
- Private Equity has consistently outperformed the other asset class due to the strong returns of Venture Capital and Growth Equity in particular.
- Private Credit’s 10-year returns are primarily driven by Origination strategies, which tend to invest in more senior positions in the capital structure relative to Distressed strategies.
- Despite having lower performance than the other asset classes, Real Assets strategies provide portfolio diversification benefits, such as, low correlations with other asset classes.
- Buyout – Any PE fund that generally takes a control position by buying a company.
- Credit – Any PE Fund whose strategy focuses on providing debt capital.
- Distressed – Includes Credit strategies with a focus including distressed and turnaround.
- Growth Equity – Any PE fund that focuses on providing growth capital through an equity investment.
- Infrastructure – An investment strategy that invests in physical systems involved in the distribution of people, goods, and resources.
- Natural Resources – An investment strategy that invests in companies involved in the extraction refinement, or distribution of natural resources.
- Origination – Includes Credit strategies with a focus including mezzanine, real estate, senior debt, and royalties
- Private Equity – A broad term used to describe any fund that offers equity capital to private companies.
- Real Assets – Real Assets includes any PM fund with a strategy of Infrastructure, Natural Resources, or Real Estate.
- Real Estate – Any closed-end fund that primarily invests in non-core real estate, excluding separate accounts and joint ventures.
- Time Weighted Return – Measures the compound rate of return on a portfolio over a stated period of time. Eliminates the effect of cash
flow timing on returns.
- Venture Capital – Venture capital includes any all private markets funds focused on any stages of venture capital investing, including seed, early stage, mid stage and late stage investments.