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Distributions to investors significantly increased, says SCM report

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In its second survey of private equity realisations, 2004 has seen a strong increase of distributions to investors according to research by SCM. In the US and Europe total distributions amounted to about $57bn of which $49bn were distributions made by US funds – an increase of almost 50% compared to the year 2003. In Europe distributions increased somewhat less by 23%, which is still a significant increase compared to 2003.

These statistics confirm the perception of market participants that 2004 has indeed been a good year for exits. By way of example, two of the largest US private equity firms have made record cash distributions to their investors over the last 18 months worth a combined $15.6bn.

For the second year now, SCM has been trying to gain some insight into the significance of different types of Exits in order to gain an understanding of the way distributions are generated in the private equity industry. SCM’s annual survey of 160 partnerships from the vintage years 1990 to 2004 managed by 50 GPs to whom SCM maintains relationships, has again allowed us to collect proprietary data that allow for a detailed and somewhat representative assessment of the exit routes chosen by GPs in Europe and the US.

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