Private equity has historically outperformed public markets

Return comparison: Private vs. public equity

Source: Pitchbook, as of December 31, 2023, latest data available.  

• The strong headline returns for U.S. stocks this year mask the realities beneath the surface.
  • Investing in the S&P 500 increasingly implies a concentrated bet on a small group of large cap U.S. tech and tech-related firms—these Magnificent 7 stocks account for more than 30% of the index’s weight and an astounding 61% of its year-to-date return.¹
  • Meanwhile, small- and mid-cap stocks have only managed to eke out a flat year-to-date return (0.46%) as the percentage of small-cap public companies generating negative earnings has increased from approximately 25% in 2012 to 41% today.¹
• There is a large, often untapped opportunity set outside the public markets: The number of private companies has increased 43% over the last several decades while the number of public companies has declined -35%.²

• As the chart shows, private equity funds have outperformed the S&P 500 over the long-term.³ In exchange for these compelling returns private equity investors give up the level of liquidity and transparency inherent to public markets.

• Private equity investing has historically been the domain of large institutions, such as pension funds and endowments, due to the high investment minimums and strict suitability requirements.
• However, there are a growing number of investment vehicles available to help individuals address many of these historical challenges as asset managers focus on expanding access to private equity.