Private markets vs. the S&P 500
1. Key Themes
Theme: Private markets vs. public benchmarks is a mixed, strategy-dependent story
Venture leads on public-market outperformance, but not by a wide margin
Venture has beaten the S&P 500 more often than any other private strategy since 2008, though barely more than half the time.
"When measured on this yardstick, venture capital fund vintages have outperformed the S&P 500 59% of the time since 2008, followed by private equity at 47%, secondaries at 29%, and funds of funds at a mere 12%."
Venture also posted the largest peak outperformance
"Venture also claimed the highest relative outperformance of any strategy, reaching a high of 1.46x in 2012."
Beating the index is not guaranteed, and fund selection matters
"Beating a public benchmark clearly isn't a slam dunk, but there are a few caveats worth noting. First, investors lucky enough to be in the best-performing funds would trounce any index."
Theme: AI infrastructure is pulling capital into power, compute, and data centers
Energy transition capital is being raised on AI power demand
"Blackstone raises $8.7 billion for its fifth energy transition fund, underscoring surging power demands from AI infrastructure amid a shifting regulatory landscape."
Compute and robotics are drawing large venture rounds
"AI computing startup Tenstorrent secured a $1.5 billion Series E led by Trace Capital and Innovation X at a $6.2 billion valuation." "Robotics startup Dream Labs raised a $90 million seed round led by B Capital and Kindred Ventures."
Grid constraints are a real bottleneck for AI buildout
"Microsoft pulled out of a deal with Nvidia-backed Nscale for a UK-based data center due to delays with the electricity grid supplying power to the site."
Theme: The IPO window is delayed at the top but open for others, and exits are diversifying
OpenAI and Anthropic IPO delays are shaping LP allocation decisions
"Go beyond the headlines on two of tech's biggest IPO delays and get a clear read on what they actually mean for Q4 capital deployment... examine how the OpenAI and Anthropic delays are reshaping capital deployment and allocation decisions as LPs weigh whether to hold steady through Q4."
Large IPOs and alternative exit routes are still moving
"Firms including BlackRock and Fidelity Management & Research are set to take anchoring stakes in digital services company Jio Platforms' $3.2 billion IPO." "Viking Global-backed biotech TriGemX Bio... agreed to merge with TCGX Acquisition Corp. in a SPAC deal."
Theme: PE geographic expansion into Asia continues
South Korea is the next PE target after Japan
"PE has already left its mark on Japan, and its next target is South Korea. After success in the neighboring East Asian country, PE activity in Korea has jumped sharply over the last four years."
2. Contrarian Perspectives
The public-market benchmark may be an unusually hard bar to clear
Rather than concluding that private markets underperform, the article suggests the comparison is skewed by the S&P 500's exceptional run, so index-beating is a harder test than usual.
"Second, the S&P 500 has had a remarkable run during the period in question."
A near-even split for private equity, and a poor showing for funds of funds, challenges the "private always wins" narrative
Only 47% of PE vintages and 12% of funds of funds beat the index, which undercuts the case for broad private allocation.
"volume private equity at 47%, secondaries at 29%, and funds of funds at a mere 12%."
Newer venture vintages are underperforming older ones
The 2017–2021 vintages, formed in the era of peak enthusiasm, have trailed the prior cohort, with each vintage doing successively worse.
"The IRRs for VC vintages from 2017 to 2021 trails those from 2012 to 2016, with each vintage from that period performing successively worse. IRRs for subsequent years point to recovery but are subject to change due to immature cash flows."
3. Companies Identified
Tenstorrent — AI computing startup. Mentioned for the largest venture round in the issue. Quote: "secured a $1.5 billion Series E led by Trace Capital and Innovation X at a $6.2 billion valuation."
Blackstone — Global alternative asset manager. Mentioned for closing its fifth energy transition fund. Quote: "closed on $8.7 billion for its fifth energy transition fund."
Anthropic — AI developer. Mentioned for its planned public benefit fund and its delayed IPO. Quote: "The startup will funnel 5% of its IPO shares into a fund that will try to mitigate the harmful effects of AI on the job market."
OpenAI — AI developer. Mentioned alongside Anthropic as an IPO delay shaping Q4 capital deployment. Quote: "how the OpenAI and Anthropic delays are reshaping capital deployment and allocation decisions."
Town — Developer of an AI work assistant. Mentioned for a $1B valuation Series B. Quote: "raised a $108 million Series B led by Forerunner Ventures and Menlo Ventures at a $1 billion valuation."
Dream Labs — Robotics startup. Mentioned for a large seed round. Quote: "raised a $90 million seed round led by B Capital and Kindred Ventures."
Nscale — Nvidia-backed data center company. Mentioned as a case study of grid constraints. Quote: "Microsoft pulled out of a deal with Nvidia-backed Nscale for a UK-based data center due to delays with the electricity grid."
Jio Platforms — Indian digital services company. Mentioned for its large IPO with anchor investors. Quote: "BlackRock and Fidelity Management & Research are set to take anchoring stakes in digital services company Jio Platforms' $3.2 billion IPO."
Salmon Group — Philippines-based fintech. Mentioned for a combined equity and debt raise. Quote: "raised $90 million in equity... as well as $50 million in debt."
Nouscom — Swiss clinical-stage cancer immunotherapy developer. Mentioned for a Series D. Quote: "raised a €120 million Series D, led by M Ventures and Revelation Partners."
Even Healthcare — India-based healthcare cost and financing company. Mentioned for a Khosla-led round. Quote: "secured a $50 million round led by Khosla Ventures."
Zap Surgical — Robotic brain surgery technology developer. Quote: "raised a $36 million round led by Catalio Capital Management."
Tolan — AI companion app developer. Quote: "raised a $30 million round from investors including Union Square Ventures, Khosla Ventures and Homebrew."
High Lander — Autonomous aviation software developer. Quote: "raised $16 million from investors including Edge Group, STEP and Protego."
Prism Data — Credit risk assessment startup. Quote: "raised a $20 million Series A led by Story Ventures."
Elementary Data — TLV Partners-backed data observability startup. Mentioned as an acquisition by an AI data company. Quote: "was acquired by AI data company Boomi."
Elice — Korea-based, Vertex Ventures-backed data center infrastructure company. Quote: "is seeking to raise 201 billion won ($151 million) in its IPO."
TriGemX Bio — Viking Global-backed migraine biotech. Quote: "agreed to merge with TCGX Acquisition Corp. in a SPAC deal."
GIC / Primary Health Properties — Singapore sovereign wealth fund and a UK healthcare property company. Mentioned for a hospital infrastructure JV. Quote: "formed a £700 million joint venture... for hospital infrastructure."
Diagram — Italian agritech firm. Quote: "Trilantic Europe and CDP Equity agreed to sell their stakes in Diagram... to BF International Best Fields Best Food."
4. People Identified
Steve Kaplan and Antoinette Schoar — Academics who devised the Kaplan-Schoar public market equivalent. Why mentioned: their metric is the basis for the private-vs-public comparison. Quote: "the Kaplan-Schoar public market equivalent, a metric devised by academics Steve Kaplan and Antoinette Schoar that reports fund returns as a multiple of what investors would have received if they had invested fund cash flows in a public market index instead."
Nigel Dawn and Naveen Nataraj — Evercore leaders. Why mentioned: appointed co-presidents. Quote: "Evercore appointed Nigel Dawn and Naveen Nataraj as co-presidents starting in 2027."
Emily Zheng — PitchBook analyst. Why mentioned: will lead the webinar on OpenAI and Anthropic IPO delays. Quote: "PitchBook's Emily Zheng and a panel of industry experts examine how the OpenAI and Anthropic delays are reshaping capital deployment."
5. Operating Insights
Benchmark funds against a public market equivalent, not just raw IRR
The Kaplan-Schoar PME restates returns as a multiple of what the same cash flows would have earned in an index, making it a more honest hurdle for allocators.
"reports fund returns as a multiple of what investors would have received if they had invested fund cash flows in a public market index instead."
Secure power and grid access early when building compute
Grid delays can kill a deal, so site selection should treat power availability as a gating item.
"Microsoft pulled out of a deal with Nvidia-backed Nscale for a UK-based data center due to delays with the electricity grid supplying power to the site."
Pair equity with debt to extend runway
Salmon Group combined a sizable equity round with a debt facility rather than relying on equity alone.
"raised $90 million in equity from investors including Spice Expeditions, Washington University Investment Management Company, and Moore Strategic Ventures, as well as $50 million in debt."
6. Overlooked Insights
Anthropic is pre-committing IPO equity to an AI job-displacement fund
Setting aside shares at IPO is an unusual governance and optics move that could become a template for AI labs facing labor-impact scrutiny.
"The startup will funnel 5% of its IPO shares into a fund that will try to mitigate the harmful effects of AI on the job market."
Developers are "vibe-coding" smart TVs back to simplicity
A small signal that user backlash against ads, tracking, and complexity is creating demand for stripped-down, privacy-first consumer tech.
"TVs have gotten so complicated that people are vibe-coding them to be dumb again. Several developers are offering solutions for smart TVs to remove ads, data tracking, simplify the home screen and more."