Private market funds have underperformed large-cap US stocks over commonly measured time horizons for the first time in nearly a quarter of a century, as a slowdown in private equity dealmaking activity hampers the sector’s returns.

State Street’s private equity index — which tracks returns from private equity, private debt and venture capital funds — delivered a 7.08 per cent return last year, compared with a 25.02 per cent total return for Wall Street’s blue-chip S&P 500 index.

The data shows that the S&P 500 outshone private markets funds for the last three months of 2024, as well as on a one, three, five and 10-year basis. That marks the first calendar year that private markets funds have underperformed the stocks index across all measured time horizons since 2000.