Positive Returns Across Private Markets in Q1
The major investment strategies in private markets — private credit, private equity and real assets — each started 2025 showing an improvement on Q4 2024, according to the most recent update of the MSCI Private Capital Universe.
Private credit edges private equity, real assets
Global private-credit funds just beat out private equity in Q1, posting a 2.0% quarterly return, driven by strong returns in the senior (2.9%) and mezzanine (2.4%) cohorts. These returns mirror the moderately positive performance seen in bond indexes over the same period.
Despite headwinds facing the asset class, private equity showed a 1.8% quarterly return, led by venture capital with a positive 2.0% result. All three private-equity subgroups delivered positive returns, in contrast to global listed markets, which endured a weaker quarter; for example, the MSCI ACWI Small Cap Index delivered a -3.2% return for Q1.
Real-asset closed-end funds also posted a 1.8% return, marking a rebound for the asset class following a dip at the end of 2024. Infrastructure led with a positive result of 3.1%. Real estate, which has generally shown quarterly declines over the past three years because of higher interest rates, managed to post a positive 0.6% return to start the year.
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 2025 from the MSCI Private Capital Universe.
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Night of the Living Fund: The Rise of Zombie Private Equity
Zombie private-equity funds are carrying unusually high net asset values due to persistently low distribution rates. This trend challenges traditional cash-flow models and raises concerns about liquidity in private-capital portfolios.
Put performance in context with private asset benchmarks
Understand private asset performance with MSCI’s benchmarks and indexes. Measure portfolios, justify allocations, report confidently in the private markets.
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