• Private equity returns gap is nearly seven times as wide as large-cap public equities: 19.2 percentage points between top and bottom quartile managers, compared with 2.9 percentage points for large-cap equities
• Performance gap compounds over time, with top-quartile PE funds potentially compounding to twice the return of median performance funds over ten years
• Manager name won’t guarantee success: two-thirds of top-quartile managers fail to repeat their ranking in next vintage

Berlin, 15 September 2026 – New research by Moonfare, the global private markets platform and manager, exposes the stark divide between the best and worst-performing private equity managers, underlining the importance of manager selection in an asset class where returns can vary significantly.

The study, Dispersion in private markets, shows the annual return gap between top and bottom quartile private equity managers was 19.2 percentage points between 2016 and 2026, compared with just 2.9 percentage points in large-cap equities.¹

In a long-duration asset class, this spread becomes more pronounced over time. Differences in annual performance compound into very large gaps in ending value over a fund lifetime. In an illustrative constant-IRR calculation based on quartile performance across private equity vintages from 2000 to 2023, the ending value implied by top-quartile performance was around twice that implied by median performance over ten years, showing how dispersion can compound over time.

The research challenges the idea of a ‘single private equity return’ and spotlights the importance of fund curation. For investors who choose weaker managers, the gap can compound significantly over a fund’s lifetime, leaving them well behind those invested with the market’s strongest performers.

The report also highlights the challenge of access, with the strongest funds structurally oversubscribed and capacity frequently constrained.

Steffen Pauls, Founder and Co-CEO of Moonfare, said: “This research shows how simply gaining access to private markets doesn’t guarantee investor returns. A well-known name tells you where a manager has been, not where they are going.

By the end of this decade, we expect capital to have concentrated around a much smaller group of managers who have demonstrated a repeatable edge. That could make fundraising longer and materially more challenging for the rest. For investors, the ability to identify and access the right managers will become even more important.”

Moonfare analysed 647 fund-to-fund transitions across closed, finite-life buyout funds to assess whether performance persists across successive funds. A top-quartile fund was followed by another top-quartile fund 34% of the time, demonstrating the structural advantage of fixed GP effects, such as differentiated sourcing, deal pipelines and operational expertise, in sustaining outperformance.

But the analysis shows why manager selection cannot rely on reputation alone, with two in three top-quartile performers (66%) failing to repeat that ranking in their next fund.

Download the full research, Dispersion in private markets: Manager selection unlocks the premium, here.

¹J.P. Morgan Asset Management. "Guide to Alternatives," 2026.