The private equity markets have been a darling for many pensions and endowments because of their strong long-term returns. Of course, investors should expect a premium over public markets because money is locked up for a long period of time. The problem is that many funds are nearing the end of their lives, yet many of the underlying investments have not been sold to other firms or IPOed. The money invested 10 years ago has not met expectations for a sale. The funds will have to extend their life. The IPO market has improved in 2026, but the numbers are deceiving since there have been a few very large deals.
This private market environment suggests that investing in more liquid public markets should be viewed as a more viable option.
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