insights

What do investors need to know about private equity investing

  • Private equity has historically outperformed public equities, with the Cambridge Associates Private Equity benchmark producing an excess return of +5.6%1 per annum compared to the MSCI World Index since 2008.
  • Private equity’s long-term investment horizon, coupled with direct control through which managers can bring operational skill to bear, mean that investment managers can be afforded the time to effectively execute value add theses without being burdened by daily mark-to-market volatility.
  • Diversification of investments across strategy, vintage year, sector, stage and geography is key to building a successful private equity program.
  • Manager selection is also important for investors to consider, due to the wide dispersion in private equity manager performance.

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1Source: Cambridge Associates and Bloomberg as of 31 March 2022