U.S. Private Equity vs. U.S. Public Equity Returns

 

U.S. Private Equity vs. U.S. Public Equity Returns

Private and public market horizon IRRs* (%)
 

What is this chart showing?

• Returns (horizon IRRs) by North America Private Equity have consistently outperformed both large-cap (S&P 500) and small-cap US (Russell 2000) stock market indices.
   
• On a trailing 20-year period, North America Private Equity has generated roughly a 15% annualized return, versus 10.4% and 10.0% for the S&P 500 and Russell 2000 Growth indices, respectively.

Why is it important?

• Most of today’s economic growth is taking place outside of the public markets.
   
• Historically, investment opportunities in private markets (including private equity) has been limited to institutional investors.
   
• More eligible investors can now access private market investment opportunities and can consider diversifying their portfolios to capture these opportunities.

 

Source: iCapital, PitchBook, iCapital Investment Strategy, with data compiled on November 8, 2023. Note: All  return data is as of March 31, 2023. North America Private Equity is a composite of all private equity funds on the PitchBook platform. *Horizon Internal Rate of Return (IRR) is a cap-weighted pooled calculation that shows the IRR from a certain point in time. Historical IRRs are included solely for the purpose of providing information regarding private market industry returns and returns of other asset classes over certain time periods. For illustrative purposes only. This is not intended to be an offer or solicitation to employ a specific investment strategy. Past performance is not indicative of future results. Future results are not guaranteed.