News & Reports

Global fund performance holds strong, but a decline could be on the horizon

One-year horizon IRRs through Q3 2021 remained incredibly strong despite another wave of COVID-19 during the quarter that raised concerns about a pullback in performance. Returns to date indicate that the majority of private market funds have been able to pivot to handle pandemic-related challenges.

Our latest Global Fund Performance Report uses data through Q3 2021 as well as some preliminary Q4 figures to provide a comprehensive look at the returns of various fund strategies. We also examine why public market comparisons may lead to disappointing private markets performance in coming quarters.

Key Takeaways

• Private equity returns cooled in Q3 2021, dropping to 6.8% amid a quickly changing macroeconomic backdrop. That figure represents the strategy's lowest quarterly IRR since Q1 2020.
• Real estate hit a 17.2% one-year horizon IRR, its best one-year performance since 2014, with preliminary Q4 IRR suggesting a bright future for the asset class.
• Private debt performance waned drastically during the quarter, but still remains strong on an annual basis, though deceleration of these figures is anticipated in coming quarters
• Secondaries funds stepped up to a new level of fundraising in 2020 and experienced a substantial uptick in performance during 2021, notching a one-year horizon IRR of 52.5%.
• This report was reuploaded on May 13, 2022, to update the legend of the chart on page 3.