Quarter-End Insights

Private Equity: PE Outperforms and Closes the Valuation Gap

  • Private equity tends to outperform in periods of falling public equity prices, having done so in 19 of the 20 quarters since 2001 in which public equities registered negative returns.
  • PE is highly correlated to public equities, meaning absolute returns in recent periods and the near term will probably be lower than in years of a booming public equity market.
  • PE funds recorded healthy gains in the first quarter of 2018 while public equities lagged in an increasingly volatile market. The gap in enterprise value/EBITDA multiples shrank to the lowest level in four years.