As market volatility surges and public equities stagger under the weight of policy uncertainty, private equity’s track record in downturns deserves renewed attention. This note examines how the asset class has performed across past corrections and recessions—highlighting not only its historical resilience, but the unique factors investors must consider in today’s environment.1
The S&P 500 sits in the throes of a correction borne out of concerns around the economic impact of U.S. trade policy and exacerbated by historically elevated public market valuations. Forecasters—many of whom entered 2025 sanguine on the prospects for U.S. growth following Republicans’ sweep of Congress and the presidency—have begun to rapidly downgrade expectations for 2025 U.S. growth domestic product (GDP) growth. Similarly, consensus analyst expectations for 2025 S&P 500 earnings per share (EPS) have declined by almost 3% since the inauguration, as large multinationals figure to bear the brunt of rising trade frictions.1 This economic uncertainty and market volatility elicit the question of how private equity will fare in adverse market scenarios. Of course, the current environment is unlike any in modern history, insofar as risks to the economy are being driven principally by policy choices and, as a result, could be largely remedied by policy choices as well. Still, we believe data from prior recessions and other periods of market volatility can help investors gauge the range of potential impacts on private equity performance.
Private equity performance during public market dislocations
We utilized the Pitchbook All U.S. Private Equity Index to measure the performance of U.S. private equity during public equity market corrections over the past 25 years. The index tracks the net-of-fees performance of a broad set of closed-end U.S. private equity drawdown funds across investment styles and vintages. As a result, the performance quoted herein is most relevant for a well-diversified investor in U.S. private equity. We would note the composition and standard terms of the private equity market have changed over time, and the exact dates of public equity market selloffs and the corresponding performance of private assets do not match up precisely because private equity portfolios are generally valued quarterly. However, we believe this data is broadly indicative of how investors could expect the U.S. private equity assets class to react under a variety of circumstances.
