Key Takeaways
- • PEI Group's quarterly fund performance reports provide proprietary data and market insights tracking private equity, private credit, real assets, and infrastructure performance relative to public markets.
- • Small funds demonstrate significant performance volatility, starting near 10% returns, declining to approximately 8% in 2022, then recovering consistently to approximately 18% by Q4 2025, indicating a sustained rebound in the private markets cycle.
- • U.S. private equity exit activity reached $682 billion year-to-date through Q4 2025, representing the strongest performance since 2021 and nearly doubling the prior year's $383 billion figure, signaling robust portfolio company monetization activity.
- • Institutional investors including the International Finance Corporation (proposing $125 million in commitments), Texas Teachers Retirement System ($355 million commitment), and family offices continue deploying capital into private markets despite macroeconomic headwinds from persistently elevated interest rates.
- • Two-thirds of investors view private markets as offering superior opportunities for sustainable and impact-focused investments compared to public market alternatives.
Summary
PEI Group released its latest quarterly private markets performance report providing comprehensive analysis of fund performance across private equity, private credit, real assets, and infrastructure sectors. The report leverages proprietary data combined with editorial expertise to deliver institutional-grade market insights to sophisticated investors navigating the private capital landscape.
Performance metrics reveal a bifurcated recovery trajectory across fund size cohorts. Small funds experienced notable volatility through the 2022 rate hiking cycle, declining to approximately 8% returns before mounting a consistent recovery through 2025, reaching approximately 18% by the fourth quarter. This recovery pattern underscores the extended duration of the private markets adjustment cycle and suggests renewed value creation momentum as multiple compression pressures eased.
Exit activity data demonstrates robust liquidity conditions for private equity sponsors. U.S. private equity exit value totaled $682 billion year-to-date through Q4 2025, marking the strongest annual performance since 2021 and nearly doubling the $383 billion recorded in the prior year. This substantial increase in monetization activity reflects improved market conditions for portfolio company sales, secondary transactions, and initial public offerings after a prolonged period of constrained exit environments.
Capital deployment continues across institutional investor categories despite persistent macroeconomic headwinds. The International Finance Corporation announced a $125 million private equity commitment, while the Texas Teachers Retirement System allocated $355 million to the sector, demonstrating continued institutional conviction in private markets risk-adjusted returns. Concurrently, investor surveys indicate that two-thirds of respondents view private markets as offering superior opportunities for sustainable and impact-focused investing relative to public market alternatives, suggesting a structural reallocation of capital toward private structures for ESG-aligned mandates.
Performance metrics reveal a bifurcated recovery trajectory across fund size cohorts. Small funds experienced notable volatility through the 2022 rate hiking cycle, declining to approximately 8% returns before mounting a consistent recovery through 2025, reaching approximately 18% by the fourth quarter. This recovery pattern underscores the extended duration of the private markets adjustment cycle and suggests renewed value creation momentum as multiple compression pressures eased.
Exit activity data demonstrates robust liquidity conditions for private equity sponsors. U.S. private equity exit value totaled $682 billion year-to-date through Q4 2025, marking the strongest annual performance since 2021 and nearly doubling the $383 billion recorded in the prior year. This substantial increase in monetization activity reflects improved market conditions for portfolio company sales, secondary transactions, and initial public offerings after a prolonged period of constrained exit environments.
Capital deployment continues across institutional investor categories despite persistent macroeconomic headwinds. The International Finance Corporation announced a $125 million private equity commitment, while the Texas Teachers Retirement System allocated $355 million to the sector, demonstrating continued institutional conviction in private markets risk-adjusted returns. Concurrently, investor surveys indicate that two-thirds of respondents view private markets as offering superior opportunities for sustainable and impact-focused investing relative to public market alternatives, suggesting a structural reallocation of capital toward private structures for ESG-aligned mandates.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.