Private equity's resilience during major crises: a 25-year analysis

Private equity consistently outperformed listed markets during the largest market crises of the last 25 years. Outperformance was twice as high during the dot com crash, global financial crisis, Eurozone crisis, Covid-19 outbreak, and the recent return of inflation, relative to undisturbed periods. The research found the following returns insights:

• Global private equity outperformed the MSCI ACWI Gross Index during each of the major disruptions with an average annualised excess return of 8%.
• When comparing performance to the S&P 500 Total Return Index, global private equity has also consistently outperformed during all five crises, with an average outperformance of 4%.
• The maximum quarterly drawdown over the five periods averaged -18% compared to the -31% drawdown of the MSCI ACWI Gross Index

Private Equity results have been driven by structural, fundamental, and technical factors specific to the sector.

In today's exit environment, distributions are a key focus for LPs. Current distributions are close to 10% of net asset value, which is half the long-term average. By comparison, they were just 5% during the Dotcom Crash and GFC.

Wider market turbulence has proved challenging to investors and businesses, while private equity still managed to deliver impressive absolute and relative performance.

For more market insights, please see the full private equity resilience report.