Private equity is moving through a period of adjustment rather than decline. Returns have cooled from the highs of the last decade as higher interest rates and elevated entry valuations continue to work their way through recent vintages, and the market beneath that headline trend has grown noticeably more uneven. Manager selection and strategy now matter more than broad market exposure. Liquidity remains the defining constraint on the asset class, with capital returning to investors more slowly than in prior cycles, and structures built around control over price and holding period are pulling ahead of those still tied to the assumptions of the previous cycle. Fundraising activity has been broadly positive, with capital formation accelerating across several markets. The sections that follow examine where performance stands today, what is driving the divergence beneath the surface, and what to watch as the cycle continues to evolve. Full benchmark tables by vintage are provided at the back of this report.
Performance on an IRR basis remains softer for the 2021 and 2022 vintages, a direct result of capital deployed during a period of higher valuations and lower interest rates. The 2023 and 2024 vintages are still early in their development, though 2023 has already recovered to levels last seen before the 2021 downturn.
Distributions have declined steadily since 2017: Managers are holding assets for longer than in prior cycles, and at the lower end of the market many are choosing to develop assets over extended periods through buy-and-build strategies instead of pursuing a faster exit.
Secondaries and direct co-investments have distinguished themselves within this environment: Both structures give investors greater control over entry price and holding period than a primary commitment to a blind pool fund, an advantage that has become more valuable while exit timing remains uncertain.
The research and analysis in this report are powered entirely by Dakota Marketplace, the most comprehensive private markets database built for the institutional investment community. Dakota’s 60-plus person data team researched, verified, and maintained every data point referenced in these pages by hand, with real people who verify the information and update records with the rigor that institutional-grade intelligence demands. This report is the output. The database is the foundation.
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