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Private equity's resilience during major crises: a 25-year analysis
Private equity has consistently outperformed listed equities during the major crises of the past 25 years. We explore the reasons behind this resilience and the lessons for future private equity allocations.
Key points:
- Private equity consistently outperformed listed markets during the largest market crises of the past 25 years
- During the past 25 years, the outperformance from private markets was twice as high during crises relative to undisturbed periods
- Distributions, a key concern for LPs, became less volatile during recent crises
- Structural, fundamental and technical factors explain private equity’s outperformance
- To navigate future crises, investors should consider diversifying within private equity and beware of boom-bust cycles
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