Private Capital in Focus: Equity Leads, Credit Improves in Q2
Returns in private markets advanced again in the second quarter of 2025, led by private equity. Credit strategies continued to deliver steady gains and returns for real-asset strategies improved.
Global private equity posted a 4.2% return, its strongest quarterly result since 2021. Venture capital posted the highest return across private-capital subgroups, at 5.0%, marking a notable rebound after several quarters of weakness. Expansion capital gained 2.6% and buyouts added 4.1%, reflecting broad-based strength across equity strategies. Public equities, however, surged even more sharply. The MSCI ACWI Investable Market Index returned 11.1%, underscoring the challenge for private equity to keep pace with listed markets in rally periods.
Global private credit gained 3.4%, improving upon its Q1 pace. Senior and mezzanine strategies led at 4.8% and 4.1%, respectively, while distressed credit was positive at 2.1%. Senior’s Q2 return was its best in the past decade, albeit with a boost from exchange rates in the Q2 period. Against liquid-credit benchmarks, private credit stood out: High-yield bonds rose 3.4% and investment-grade corporates 1.6% during the quarter.
Real-asset funds posted a positive 3.2% return, supported by infrastructure’s 4.8% gain. Real estate gained 1.3%, despite ongoing refinancing pressures and valuation uncertainty, marking a notable positive result after mostly negative quarters since 2021.
Taken together, Q2 highlighted the breadth of positive performance across private markets. Questions remain on realizations, particularly in private equity, however. With exit activity still limited, translating paper gains into actual distributions continues to be the key challenge for investors.
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 Q2 2025 from the MSCI Private Capital Universe.
Subscribe todayto have insights delivered to your inbox.
Decent Exposure? Rethinking Private-Equity and Credit Cross-Investment
Private-credit and private-equity positions in the same company may be more diversifying than investors concerned about dual exposure think. We examine the strategies’ overlap and performance.
Sprint to the Exit: Beware the Late-Stage Margin Growth in Buyout Companies
Private equity’s late-stage push to expand portfolio companies’ margins is under scrutiny. We explain why buyers and limited partners should pay attention to the margin growth ahead of exits.
Private Capital Intel
Benchmark performance with one of the largest private capital datasets. Report, allocate, pace, report and assess risk and return.
The content of this page is for informational purposes only and is intended for institutional professionals with the analytical resources and tools necessary to interpret any performance information. Nothing herein is intended to recommend any product, tool or service. For all references to laws, rules or regulations, please note that the information is provided “as is” and does not constitute legal advice or any binding interpretation. Any approach to comply with regulatory or policy initiatives should be discussed with your own legal counsel and/or the relevant competent authority, as needed.