Distressed funds generate 5.23% in Q4

Institutional Limited Partner Association benchmark data released on Tuesday reveals middling returns for distressed funds.

Distressed funds generated middle-of-the-pack returns for the quarter ending 31 December, according to data released by The Institutional Limited Partners Association (ILPA) on Tuesday.

A pool of 190 distressed funds netted an internal rate of return of 5.23 percent for the quarter. The pool generated a one-year return of 17.45 percent, a three-year return of 11.86 percent, a five-year return of 18.75 percent and a 10-year return of 11.67 percent.

ILPA’s total fund benchmark generated 6.96 percent on the quarter and outperformed the distressed pool on a one, three and ten year basis. Total fund benchmark returns fell below those generated by the distressed pool on a five-year basis, having generated 15.05 percent.

Distressed outperformed ILPA’s pools of secondary, natural resources and European private equity and venture capital funds on the quarter. 

ILPA assembled its benchmark alongside research and advisory firm Cambridge Associates. Cambridge defines distressed funds as those that that make debt and equity investments in companies that are in financial or operational distress.

The organisation expects to release its Q1 performance figures during the week of 18 August, according to a statement.