Due to limited public data on private equity investments, it is difficult for the larger investment community to observe and evaluate the historical performance of private equity funds. Our experience suggests that investors in private equity have historically earned a return that is 400 to 600 basis points in excess of the public markets over the same period of time. The performance of the Cambridge Associates LLC U.S. Private Equity Index would appear to support this record of outperformance. With an average annual return of 14.8% between 1994 and 2022, private equity has put plenty of distance between itself and U.S. equities (8.9% per year), international equities (6.4%), and bonds (4.2%).
