US private equity and venture capital funds began 2014 with positive first quarter returns, as indicated by the Cambridge Associates LLC benchmark indexes. Compared to their strong fourth quarter performance, private equity and venture capital fund returns were lower for the quarter, as were public equity returns.

For the second quarter in a row the venture capital index outperformed the private equity benchmark. Both indexes outperformed the public markets during the quarter but private equity in particular has struggled against the public indexes over the medium term. Consistent with the long-term investment thesis of these asset classes, private equity and venture capital both handily beat the public markets on ten-year or longer horizons.

The private equity benchmark has been positive the last seven quarters and the venture capital index earned positive results over the last ten quarters. The public markets have been relatively strong since the financial crisis, with the S&P 500 and other key market indexes producing negative returns in only two of the last ten quarters.