Update: Marathon-style Performance

This chart has been updated from the previous version.

Private & Public Market Cumulative Returns

Rewinding the clock, private and public markets saw robust growth through 2020 and 2021. That reality drastically changed in 2022 as a result of rates moving higher and a dash of geopolitical uncertainty. Our chart this week looks at the cumulative returns of private and public markets since the last peak in Q4 2021. After a sharp decline to start 2022, public equities rebounded sharply and have performed well, driven largely by a handful of tech-focused, mega-cap names. We observe that, recently, private equity has underperformed public markets in the short run. Buyout outperformance has historically been most pronounced during periods of mediocre or negative public market returns.  

Conversely, credit has benefited from the current sovereign rate environment and infrastructure continues to generate respectable yields with cost-passing and capital preservation benefits, showing strong performance relative to publics in both of those asset classes. While public markets may experience sharper movements over short-term periods (< 3 years), we believe private market strategies will continue to outperform in the long run. 

Catch up on Chart of the Week.

Definitions

All Private Markets – Hamilton Lane’s definition of “All Private Markets” includes all private commingled funds excluding fund-of-funds, and secondary fund-of-funds. 

DM Buyout – Includes any buyout fund that is primarily investing in developed markets of North America, Western Europe and Global. 

EU Buyout – Any buyout fund primarily investing in the European Union. 

Growth Equity – Any PM fund that focuses on providing growth capital through an equity investment. 

Infrastructure – An investment strategy that invests in physical systems involved in the distribution of people, goods, and resources. 

Venture Capital – Venture Capital incudes any PM fund focused on financing startups, early-stage, late stage, and emerging companies or a combination of multiple investment stages of startups. 

S&P 500 Index – The S&P 500 Index tracks 500 largest companies based on market capitalization of companies listed on NYSE or NASDAQ. 

MSCI World Index – The MSCI World Index tracks large and mid-cap equity performance in developed market countries. 

Credit – This strategy focuses on providing debt capital. 

Credit Suisse Leveraged Loan Index – The CS Leveraged Loan Index represents tradable, senior-secured, U.S. dollar-denominated non-investment grade loans. 

BofAML High Yield Index – The BofAML High Yield index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. 

Real Estate – Any closed-end fund that primarily invests in non-core real estate, excluding separate accounts and joint ventures.