Key Takeaways
- • The American Investment Council released a report using PitchBook data demonstrating that private equity generated superior returns across 5-, 10-, 15-, and 20-year time horizons compared to public markets and other asset classes, even after accounting for fees.
- • Private equity delivered a median annualized return of 13.5% over a 10-year period, with more than 90% of institutional investors achieving positive results, positioning the asset class as a consistent long-term performance driver.
- • The report indicates that private equity-backed companies exhibit higher growth rates and better operating margins on average than publicly traded firms, providing a fundamental basis for outperformance.
- • While public markets and certain asset classes may outperform private equity in short-term periods, the long-term data consistently favors private equity across extended holding periods.
- • The report addresses expanded access to private equity through 401(k) plans, positioning private equity as a diversification and performance tool for individual savers beyond traditional institutional investor bases.
Summary
The American Investment Council released a comprehensive report on December 8, 2025, analyzing private equity performance across multiple time horizons using data from PitchBook. According to AIC President and CEO Will Dunham, the findings demonstrate that "private equity provides consistent and reliable long-term returns for investors while safeguarding financial stability for millions of Americans."
The report's core finding shows that U.S. private equity has delivered the highest returns of any asset class over 5-, 10-, 15-, and 20-year periods. Over a 10-year period, private equity investments achieved a median annualized return of 13.5%, with more than 90% of institutional investors realizing positive outcomes. Notably, these returns persist even when accounting for management fees, a critical distinction for institutional analysis of net-of-fees performance.
The underlying driver of private equity's outperformance appears to be operational: private equity-backed companies consistently demonstrate higher revenue growth and improved EBITDA margins relative to their publicly traded peers. This suggests the outperformance reflects genuine value creation through operational improvements and business optimization, rather than multiple expansion or market timing effects alone.
While the report acknowledges that public markets and certain asset classes can outperform private equity during specific short-term periods, the 5-, 10-, 15-, and 20-year time horizons all favor private equity, reinforcing the asset class's positioning for long-term institutional capital deployment. The analysis also examines fundraising and exit trends, though specific trend details were not disclosed in the report summary.
A significant policy implication of the research concerns expanding private equity access through 401(k) retirement plans. By presenting long-term performance data, the report supports the case for retail investor participation in private equity, historically restricted to institutional investors and high-net-worth individuals. This represents a potential structural shift in capital formation if regulatory frameworks enable broader 401(k) access to private investment vehicles.
The report's core finding shows that U.S. private equity has delivered the highest returns of any asset class over 5-, 10-, 15-, and 20-year periods. Over a 10-year period, private equity investments achieved a median annualized return of 13.5%, with more than 90% of institutional investors realizing positive outcomes. Notably, these returns persist even when accounting for management fees, a critical distinction for institutional analysis of net-of-fees performance.
The underlying driver of private equity's outperformance appears to be operational: private equity-backed companies consistently demonstrate higher revenue growth and improved EBITDA margins relative to their publicly traded peers. This suggests the outperformance reflects genuine value creation through operational improvements and business optimization, rather than multiple expansion or market timing effects alone.
While the report acknowledges that public markets and certain asset classes can outperform private equity during specific short-term periods, the 5-, 10-, 15-, and 20-year time horizons all favor private equity, reinforcing the asset class's positioning for long-term institutional capital deployment. The analysis also examines fundraising and exit trends, though specific trend details were not disclosed in the report summary.
A significant policy implication of the research concerns expanding private equity access through 401(k) retirement plans. By presenting long-term performance data, the report supports the case for retail investor participation in private equity, historically restricted to institutional investors and high-net-worth individuals. This represents a potential structural shift in capital formation if regulatory frameworks enable broader 401(k) access to private investment vehicles.
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