US President Donald Trump signed an executive order on August 7 directing the Department of Labor and SEC to issue guidance on the inclusion of private market assets in 401(k) plans, marking a pivotal step toward unlocking a major new source of demand for private assets and substantially accelerating the democratization of the asset class.
With a backdrop of strong, yet concentrated public markets, US private equity and venture capital posted mid to high single-digit returns in 2024, as venture capital bounced back from its two-year streak (2022–23) of negative returns.
Like in the United States, private equity outperformed venture capital in ex US markets in 2024, and with a strong US dollar, returns were much better when measured in euros.
Our global private equity operating metrics analysis highlights the key levers and value drivers in private equity, and explores a risk and return comparison between private equity and public equity. It includes dedicated Europe and Asia analyses as well as regional comparisons.
Our US private equity operating metrics analysis highlights the key levers and value drivers in private equity, and explores a risk and return comparison between private equity and public equity.
In the first half of 2024, returns from US private equity and venture capital were modest. Both private asset classes have struggled to keep up with the public indexes over the past three years, but have performed well vis-à-vis public peers over longer time periods.
Private equity (PE) outperformed venture capital (VC) in global ex US markets in the first half of 2024, just as it did in the United States, and while the global ex US PE/VC indexes have historically outperformed their public market counterparts, the most recent three years stand out as an exception.
In 2023, both the Cambridge Associates LLC Developed Markets ex US Private Equity and Venture Capital Index and Cambridge Associates LLC Emerging Markets Private Equity and Venture Capital Index earned positive returns but underperformed their public counterparts. This contrast between private and public market returns is common during recovery years, as valuations for private investments typically take longer to reflect improvements in economic conditions.
In 2023, US private equity performed better than venture capital, but returns for both asset classes trailed those of the public markets, which rebounded strongly from a tough 2022.
Delve into our global private equity operating metrics analysis that not only illuminates the fundamental levers and value drivers in private equity, but also explores a risk and return comparison between private equity and public equity.