For years, private equity has carried an aura of exclusivity as funds are generally reserved for wealthy investors, charged substantially higher fees than ordinary index funds, and promised access to opportunities unavailable on public markets. But lately, that exclusivity hasn't translated into better returns.
Private equity funds have significantly underperformed the S&P 500 over the past several years, according to data cited by CNBC. The figures highlight that expensive and difficult-to-access investments aren't necessarily superior to the inexpensive funds available to virtually anyone. Cambridge Associates' Private Equity Index, which tracks roughly 1,800 funds, returned an annualized 7.4% during the three years ending in March and 9.3% over five years, net of fees.
