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.
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.
In the first half of 2023, despite macro headwinds, US private equity remained resilient, while venture capital continued to “correct.”
Private equity and venture capital (PE/VC) in the developed markets outperformed those in emerging markets in the first half of 2023, and while the developed and emerging markets PE/VC indexes have historically outperformed their public market counterparts, the most recent year stands out as an exception.
In 2022, the Cambridge Associates LLC Developed Markets ex US Private Equity and Venture Capital Index returned -11.1% in USD terms, marking a sharp reversal from two strong years in 2020 and 2021. Performing slightly better than its developed markets counterpart, the Cambridge Associates LLC Emerging Markets Private Equity and Venture Capital Index returned -8.1% for the year in USD terms, but it also suffered a substantial reversal from strong performance in recent years.
A year after posting their second highest annual returns ever, performance for the US private equity and venture capital indexes fell back to earth in 2022.