Public Markets as a Path to Private Equity Returns
Private equity’s illiquidity, large capital commitments and limited transparency can make it hard to access. To address this, last year we launched the MSCI World Private Equity Return Tracker Index (PERT) that aims to capture the systematic drivers of private equity’s performance through public equities.1
From December 2006 to March 2026,2 private equity, represented by the MSCI Developed Private Equity Closed-End Fund Index, outperformed public markets, and PERT reflected more than half of that advantage. In the past three years, PERT has delivered an annualized active return of roughly 10%3 over the closed-end-fund index, a trend that continued post-launch.4 The past few years’ relative performance reflects PERT’s sharp rebound after the 2022 rate-hike cycle, the strong performance of public technology stocks and the volatility that private valuations smooth out.
PERT, built from listed securities that price continuously, offers a direct view of the hidden volatility in private-equity valuations. Over the full period, the closed-end fund index reported risk of 9.7%, versus 18.8% for PERT. Drawdowns and recoveries show the difference most clearly: PERT fell in line with the broad public market and well beyond the closed-end-fund index, then rebounded more strongly.5
Investing in a private-proxy public portfolio is a potential alternative for investors who cannot access private equity directly, or a place to hold cash while limited partners’ committed capital awaits deployment. Not everything can be captured in a public proxy, including general partners’ skill and the illiquidity premium. Public markets reveal volatility that appraisal-based valuations smooth over, which can cause short-term benchmark deviation but also means risk is visible as it emerges, allowing investors to make more timely decisions.
Public data from December 2006 through September 2026 and private data from December 2006 to March 2026. March 2026 is the latest reporting quarter of the MSCI Developed Private Equity Closed-End Fund Index.
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1 Certain characteristics — such as general partner skill — are unique and beyond the scope of a rules-based, transparent index.
2 Private equity data lags by several months. March 2026 is the latest reporting quarter of the MSCI Developed Private Equity Closed-End Fund Index.
3 Please refer to the fact sheet of MSCI World Private Equity Return Tracker Index. The MSCI World Private Equity Return Tracker Index was launched on July 16, 2025. Return data prior to the index launch date is backtested. There are frequently material differences between backtested performance and actual results. Past performance — whether actual or backtested — is no indication or guarantee of future performance.”
4 In the past six months, however, the trend reversed, and PERT underperformed the closed-end-fund index by 2.6% (cumulative), while still delivering positive active returns over the broad public market.
5 Over the full period, PERT delivered a higher risk-adjusted return than the MSCI World IMI Index, with a return/risk ratio of 0.6 versus 0.4.
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.