Private equity returns

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What returns does private equity truly offer? According to France Invest and EY, French private equity has delivered a net IRR of 12.4% per year over ten years (data as of 12/31/2024), a performance that places this asset class above the CAC 40 (8.9% over ten years, dividends reinvested), the MSCI World, and all bond investments. However, behind this average, the dispersion between funds remains considerable, and private equity returns should be examined strategy by strategy. Here is a comprehensive overview of performance, risks, and access conditions.

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Private equity: a brief overview of the asset class

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Private equity refers to investments made in unlisted companies. Specifically, a fund raises capital from investors (institutional, family offices, individuals), acquires stakes in unlisted companies, supports their growth for 5 to 10 years, and then sells these stakes to generate capital gains.

Private equity returns thus stem from a long cycle: company selection, operational transformation, and value realization through an industrial sale, an IPO, or an acquisition by another fund. This mechanism explains both its performance potential and its structural illiquidity. Two key players structure the market: Limited Partners (LPs), who provide the capital, and General Partners (GPs), who manage the fund and select target companies.

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What returns can be expected from private equity in 2026?

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Key figures: Average net IRR over 10 years

The annual study by France Invest and EY, published in July 2025 (data as of 12/31/2024, 1,262 funds analyzed), sets the net IRR for French private equity at 12.4% per year over the last ten years. This figure is calculated net of management fees and carried interest, representing the actual return received by investors.

Over fifteen years, performance stands at 13.3% per year according to the same sources, which is 4.3 percentage points above the CAC 40 with reinvested dividends (10.7%). Over ten years, the difference is even clearer: 12.4% vs 8.9% for the CAC 40, or +3.5 percentage points per year. Since the inception of the tracked funds, the net IRR stands at 11.3%, making it one of the best-performing asset classes over the long term.

Performance history and recent developments

Private equity returns have not always been at this level. The 1990s and 2000s saw very different performance cycles depending on the vintage years. The years 2010 to 2018 marked a historic phase with high exit multiples, supported by falling interest rates and the increasing valuation of unlisted companies, particularly in tech.

Since 2022, the environment has become tougher: rising interest rates, a slowdown in IPOs, and longer holding periods. Funds raised between 2020 and 2022 show more mixed performance, particularly in venture capital where late-stage valuations need to be absorbed. More mature funds (2014 to 2017 vintages), however, continue to deliver solid multiples, indicating that older exits remain strong performers.

How performance is measured (IRR, multiple, DPI)

Three indicators coexist to measure private equity returns:

• IRR (Internal Rate of Return) : an annualized rate that takes into account the timing of capital flows. It's the most widely used indicator, but it favors funds that distribute quickly, even with a moderate multiple.
• Multiple (TVPI or MOIC) : the ratio between total value (distributed + residual) and called capital. A 2.5x multiple means that the initial capital has been multiplied by 2.5 by the end of the cycle.
• DPI (distributed to paid-in) : the portion of capital already returned to the investor. It's the only truly liquid indicator, the rest being the accounting valuation of holdings still in the portfolio.

A fund can show a high IRR due to a quick exit while delivering a moderate multiple. That's why these three metrics should always be looked at together, and one should not rely solely on the IRR communicated early in a fund's life.

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Private equity performance by strategy

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Venture capital

Venture capital, also known as venture capital, invests in startups in their seed or growth phase. It's the riskiest strategy but also the one offering the highest potential multiples, with targets of 4x, 5x, or even 10x on the best deals.

The venture & growth segment shows a net IRR since inception of 6.6% according to France Invest/EY 2025, but this figure masks considerable dispersion depending on vintage years. Funds launched in 2015 delivered an average IRR of around 27%, while those launched between 2020 and 2022 show less than 5%. The logic of venture capital relies on Pareto's law: out of ten investments, two or three generate the bulk of the returns, the others are losses or average exits. The best-performing funds benefit from privileged access to the most promising startups, making manager selection critical.

Growth equity

The growth equity Growth equity targets mature, already profitable companies that need capital to accelerate their organic or external growth. It's a compromise between the high risk of venture capital and the stability of LBOs.

The net IRR for growth equity has been 9.0% since inception, according to France Invest/EY 2025. Target multiples for recent, mature funds range from 2.5x to 3.5x over seven to ten years. Performance dispersion remains less pronounced than in venture capital, and growth equity benefits from an already validated business model, which reduces the risk of total failure.

Buyout (LBO)

Buyout or leveraged buyout(LBO) finances the acquisition of mature companies with a combination of equity and debt. It is the historical strategy of private equity, particularly well-established in France and Europe, and the one that mobilizes the most assets under management.

The net IRR for French LBOs has been 14.1% since inception, according to France Invest/EY 2025, making it the best-performing segment over time. Target multiples are around 2x to 2.5x. LBO funds generally benefit from more stable capital structures and clear operational value creation plans: management optimization, external growth, debt restructuring, strategic repositioning.

Secondaries and Private Debt

The secondary market involves acquiring fund stakes held by other investors before maturity. This strategy delivers the most consistent returns: target multiples of 2x to 2.5x, net IRRs often between 12% and 14%, with a significantly shortened J-curve because underlying assets are already mature and exit visibility is better.

Private debt, distinct from private equity but often classified under unlisted assets, offers returns of approximately 9% to 11% per year in the form of regular interest and repayments. It is characterized by lower volatility and a spread-out distribution of cash flows over time, making it an attractive diversification component compared to venture capital and LBOs.

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Comparing Private Equity Returns Against Other Investments

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Versus Livret A, Euro Funds, and Guaranteed Investments

As of February 1, 2026, Livret A yields 1.5%, and LEP yields 2.5%. Life insurance euro funds reported 2.6% in 2024 and approximately 2.65% according to the preliminary ACPR 2025 estimate. Compared to a net IRR of 12.4% for private equity, the difference is massive: a PE investment yields 5 to 8 times more than a guaranteed product, in exchange for no capital guarantee and strong illiquidity.

To put this into perspective, life insurance assets under management in France crossed the €2,000 billion threshold in early 2025 and reached €2,107 billion by the end of 2025, according to France Assureurs. The vast majority remains invested in euro funds, representing a massive missed opportunity in the long term for savers who allocate nothing to unlisted assets.

Versus Listed Equity Markets (MSCI World, S&P 500)

The MSCI World delivered an annualized 11.68% in EUR over ten years (MSCI factsheet March 2026), with dividends reinvested. The S&P 500 performed better during certain periods but remains highly concentrated in US tech. The CAC 40, with dividends reinvested, showed 8.9% over ten years according to France Invest, representing a +3.5 percentage point annual difference in favor of private equity over the same period.

Private equity historically outperforms listed indices by several percentage points per year, with lower accounting volatility (valuation smoothing effect) but often higher real economic volatility. Manager selection remains crucial: only first-quartile funds and the top of the second quartile truly significantly outperform listed indices. A median PE fund can perform worse than a simple global index ETF.

Versus Real Estate, SCPIs, and Crowdfunding

Direct yield real estate historically delivers between 3% and 5% per year, fees included. SCPIs (French real estate investment trusts) showed an overall annual performance (PGA) of only +1.46% in 2025 according to IEIF, with an average share price decrease of -3.45%. The distribution rate communicated by management companies remains a partial indicator: it is the overall performance that measures the true return, by integrating the variation in share price.

Real estate crowdfunding shows nominal returns of 8% to 11% but conceals a more fragile reality: according to the AMF, the 2019 vintage saw 60.2% of committed amounts delayed, and according to the Forvis Mazars/France FinTech 2025 barometer, approximately one in two projects encounters difficulties. The developer default risk is central and must be factored into the return analysis.

Compared to these alternatives, private equity returns are superior on average, but the comparison must be made net of fees, for an equivalent duration, and by integrating the actual risk taken.

Private Equity Risks to Know

Risk of Capital Loss and Quartile Dispersion

Private equity involves a real risk of partial or total loss of invested capital. The dispersion between funds is considerable: according to France Invest/EY 2025, the top quartile shows an average IRR of 23.5% and a multiple of 2.3x, while the bottom quartile can show negative performance. This dispersion is more pronounced in venture capital than in LBOs, where the differences remain contained.

Manager selection is therefore the primary lever for value creation. Investing in a median fund means accepting an overall performance that may be lower than listed markets. This justifies thorough due diligence on teams, track records, and investment processes.

Illiquidity Risk and Lock-up Period

Theilliquidity of private equity is structural. Funds have a lifespan of 7 to 10 years (sometimes 12), during which capital remains invested. Exiting prematurely means going through the secondary market, often with a discount of 10% to 30% on the net asset value.

This illiquidity is also a source of outperformance: it allows managers to pursue long-term value creation plans, without the pressure of daily quotation. However, it excludes PE from asset allocations that must remain liquid. A private equity investment should be made with money not needed for at least eight years.

J-Curve and Valuation Risk

During the initial years of a fund, the accounting valuation can be lower than the called capital: this is the J-curve. Management fees are charged from the outset, investments are not yet valued at their full potential, and exits are rare. Performance materializes in the second half of the fund's life, at the time of divestments.

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How to Access Private Equity and Capture its Returns

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Investment Vehicles (FPCI, FCPR, FCPI) and Entry Tickets

Several vehicles allow investment in private equity:

• FPCI (Fonds Professionnel de Capital Investissement) : reserved for informed investors, the most common vehicle for leading strategies. It offers great allocation flexibility and access to funds that mainstream vehicles cannot target.
• FCPR (Risk Capital Mutual Fund) : accessible to the general public, subject to investment constraints (at least 50% in unlisted assets).
• FCPI (Innovation Mutual Fund) : focused on innovative SMEs (at least 70% according to Art. L.214-30 CMF), eligible for a 25% IR-PME tax reduction only for FCPIs invested in JEI securities since the 2025 and 2026 finance laws. Classic FCPIs and FIPs are no longer eligible for reductions; only Corsican and Overseas FIPs remain eligible for 30%.

Traditional institutional entry tickets generally start at 200,000 euros, or even 1 million euros for the most selective funds. The private equity fees are also specific, with 2/20 structures: 2% annual management fees and 20% carried interest beyond a hurdle rate typically set at 8%. Reported returns are net of these fees.

Mutualization via SPV: lowering the institutional barrier

The traditional access barrier is lowered by mutualization structures. An SPV (Special Purpose Vehicle) pools subscriptions from several individual investors within a single structure, which then invests directly in the target funds. The SPV acts as a single institutional investor from the perspective of the underlying fund, while allowing individuals to participate with a reduced entry ticket.

This mechanism changes the game for access to private equity: funds reserved for institutional investors become accessible via the pooled institutional entry ticket. It also allows for diversification across several strategies (venture, LBO, secondary, private debt) without having to commit several hundred thousand euros per fund.

Fundora: access to leading funds via Kyoseil AM mandate management

Fundora identifies and offers private equity strategies selected for their institutional quality (venture, LBO, growth, secondary, private debt), structured as FPCIs with an SPV mechanism to pool subscriptions. The effective management is provided by Kyoseil Asset Management, an AMF-approved portfolio management company under number GP-99040, within the framework of the mandate.

This architecture provides access to premium strategies (Soho Secondary, Cyber Intelligence Venture, Genesis AI Venture, Belmont LBO, etc.) with a reduced entry ticket compared to institutional conditions. The approach covers a diversity of risk-return profiles, from the most consistent secondary strategies (2x to 2.5x multiples) to the most aggressive venture strategies (target 5x to 8x multiples). To invest in private equity via this architecture, or discover Fundora Plus for more committed profiles, registration is done directly on the platform.

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Private Equity Performance FAQ

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What is the average private equity performance in 2026?

The average net IRR for French private equity stands at 12.4% per year over ten years (France Invest/EY study July 2025, data as of 31/12/2024), net of management fees and carried interest. Over fifteen years, performance reaches 13.3%, and 11.3% since inception. This figure is an average: the dispersion between funds remains considerable, with the top quartile achieving an average IRR of 23.5%, while the fourth quartile can show negative performance.

Is private equity more profitable than the stock market or real estate?

On average, yes. Private equity (12.4% net IRR over 10 years) outperforms the MSCI World (11.68% annualized in EUR), the CAC 40 with reinvested dividends (8.9% over ten years, 10.7% over fifteen years), and income-generating real estate (3 to 5%). However, this outperformance comes with illiquidity and the risk of capital loss. Fund selection is crucial: a median fund can underperform listed indices.

How long is capital typically locked up in private equity?

The typical horizon is 7 to 10 years, representing a full investment and exit cycle. The initial years correspond to the capital call and value creation phase (J-curve), with subsequent years dedicated to distributions. Secondary strategies can shorten this horizon to 4 to 6 years. Intermediate liquidity remains very limited.

Is private equity accessible to individual investors?

Yes, through FPCI, FCPR, and FCPI vehicles. Pooling via SPVs allows for grouping multiple individual subscriptions within a single structure, which lowers the typical entry ticket for institutional funds. Access to premium funds remains conditional on the selection by the platforms that distribute them.

What are the management fees for a private equity fund?

Annual management fees typically range between 1.5% and 2.5%. In addition, there is carried interest, which goes to the manager beyond a performance threshold (hurdle rate generally set at 8%) and typically represents 20% of realized capital gains. The reported returns (net IRR, net multiple) are calculated after these fees.

What happens if a portfolio company goes bankrupt?

A private equity fund typically holds 10 to 30 positions depending on the strategy. Losses on one position are diluted by the performance of others. In venture capital, the portfolio strategy relies on two or three successful exits (5x to 10x multiples) compensating for the other positions. In LBOs, dispersion is lower, but the risk of bankruptcy also exists, particularly through financial leverage which amplifies operational difficulties.

How can one exit a private equity fund before its term?

Early exit is very difficult. Two avenues exist: the secondary market, which involves selling one's shares to another investor (often at a discount of 10% to 30%), or interim distributions paid by the fund when it sells positions during its life. Illiquidity remains structural: a private equity investment should be considered a very long-term placement.