Private equity is having a better go of it, all of a sudden.

PE firms and venture-capital investors have begun recovering losses from the economic downturn, according to Cambridge Associates LLC, a provider of investment research and advice to investors and other clients.

Cambridge’s data survey (released earlier this week) concluded at the quarter ending Sept. 30, 2009, and since then, times have improved for some PE firms whose LPs can expect future distributions based on their exits.

As PE firms work on a number of roll-up entities that have been unveiled earlier this year, other financial buyers have found exit opportunities — including Oak Hill Capital Partners’ exit of its Duane Reade investment and Lazard’s Edgewater Funds asset Trausch Industries.

The report called exit opportunities “limited,” however.

Investors were more willing to make plays in the market again, as well. The Cambridge research indicated PE and VE funds invested more capital in the third quarter of 2009 than in either of the prior quarters.

Venture capital, also tracked by Cambridge Associates, returned 6.2% for last year’s third quarter, marking what the researcher said was the asset class’ best performance since 2007.

The report still brings back some bad news. Public equity indices outperformed both VC and PE, Cambridge stated in its report. Further, according to National Venture Capital Association data, the number of deals with publicly announced values is about half the previous year’s third-quarter numbers, said Peter Mooradian, managing director of VC research and consulting with Cambridge.

PE and VC, over a 10-year period, returned 8.3% and 8.4%, respectively, the report stated.


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