MSCI Private Capital Benchmarks Summary Q1 2026
Preview
Private equity was divided along software lines in Q1 2026, while direct lending in private credit also felt the impact of investor concerns about legacy software businesses. Distributions for private capital overall in the quarter sagged, with private equity weaker still. Dry powder continued to ebb.
We examine these trends using data on more than 15,500 closed-end funds globally in the latest edition of our quarterly report.
Highlights:
- Venture capital (VC) and buyout went their separate ways on software in the quarter. VC’s tilt toward growth-stage software and AI-native names helped sustain returns.
- The sell-off that hit listed business-development companies in early February reached private direct-lending portfolios with IT-sector concentration, pushing quarterly returns to the lowest since 2024.
- The pattern of softer distributions typically seen in the first quarter was apparent in early 2026, with rates for private capital overall and private equity slipping below already muted levels.
Quarterly returns are calculated in USD using the Modified Dietz method and are not annualized. Calendar-year returns represent compounded quarterly returns. Data as of Q1 2026 from the MSCI Private Capital Universe.
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