Key Takeaways
- • Private debt returned 1.88 per cent in Q2 2026, lagging the broader private markets according to State Street data.
- • The State Street Private Capital Index (SSPCI) returned 4.37 per cent in the quarter, up from 0.48 per cent in Q1 2026.
- • Venture capital was the top-performing asset class over the trailing year at 30.38 per cent, driven by late-stage technology and AI-related valuations.
- • Buyout returned 2.99 per cent and venture capital 10.06 per cent in Q2, both ahead of private debt.
- • US-focused private capital funds returned 5.03 per cent versus 4.17 per cent for funds focused on the rest of the world.
Summary
Private debt delivered returns of 1.88 per cent in the second quarter of 2026, underperforming wider private markets, according to new data from State Street. The findings were published on October 29, 2026.
The State Street Private Capital Index (SSPCI) recorded an overall return of 4.37 per cent during the quarter, up from 0.48 per cent in the first three months of the year. On a one-year basis, the index returned 11.8 per cent, compared with 7.07 per cent for private debt.
Within private markets, private debt lagged both buyout and venture capital strategies, which returned 2.99 per cent and 10.06 per cent respectively in the quarter. Venture capital was the strongest-performing asset class over the year, returning 30.38 per cent, supported by valuation growth in late-stage technology and artificial intelligence-related investments.
Sector performance varied. Information technology-focused funds returned 6.41 per cent, their strongest quarterly performance since the final three months of 2021. Energy-focused funds returned 5.80 per cent, extending their positive momentum from the previous quarter, while consumer-focused funds delivered the weakest result at 0.8 per cent.
Regionally, US-focused private capital funds returned 5.03 per cent, compared with 4.17 per cent for funds focused on the rest of the world. European funds returned 1.24 per cent, up slightly from 1.15 per cent in the first quarter.
The State Street Private Capital Index (SSPCI) recorded an overall return of 4.37 per cent during the quarter, up from 0.48 per cent in the first three months of the year. On a one-year basis, the index returned 11.8 per cent, compared with 7.07 per cent for private debt.
Within private markets, private debt lagged both buyout and venture capital strategies, which returned 2.99 per cent and 10.06 per cent respectively in the quarter. Venture capital was the strongest-performing asset class over the year, returning 30.38 per cent, supported by valuation growth in late-stage technology and artificial intelligence-related investments.
Sector performance varied. Information technology-focused funds returned 6.41 per cent, their strongest quarterly performance since the final three months of 2021. Energy-focused funds returned 5.80 per cent, extending their positive momentum from the previous quarter, while consumer-focused funds delivered the weakest result at 0.8 per cent.
Regionally, US-focused private capital funds returned 5.03 per cent, compared with 4.17 per cent for funds focused on the rest of the world. European funds returned 1.24 per cent, up slightly from 1.15 per cent in the first quarter.
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