Performance for both U.S. private equity and venture capital funds was positive in the third quarter of 2012 but private equity managers fared much better , as indicated by the Cambridge Associates LLC benchmark indices of the two alternative asset classes. The private investment indices underperformed public equities in the third quarter as public markets rebounded from a negative second quarter. Over the long term, private equity and venture capital have handily beaten the public markets.
The third quarter returns for the Cambridge Associates LLC U.S. Private Equity Index and the Cambridge Associates LLC U.S. Venture Capital Index were better than those posted in the second quarter. Of the two benchmarks, the private equity index showed more improvement. A similar trend was seen in the public equity indices but not in the IPO market, which cooled in the third quarter.