Understanding Historic IRR by Vintage Year within the Private Markets

• When we look at historic IRR by vintage year, private equity funds have the highest returns in each of the past ten vintage years. Historically, private equity has higher returns relative to credit and real assets because it is a riskier asset class. Just like in the public markets, equity is riskier than debt because equity is below debt in the capital structure. Therefore, you should expect PE to have higher returns than private credit.
• As the chart shows, only real assets in 2010 yields negative returns. This demonstrates the downside protection that private markets offer across styles.
• Even though private credit generally produces lower returns than other strategies, it can be an attractive addition to portfolios due to its low volatility

To learn more about other insights that Hamilton Lane’s data can provide through Cobalt, click here.