Private equity has delivered better returns for less risk
Private equity has delivered 5x in absolute returns and ~50% milder drawdowns than public equities.
There are many differences between private and public market investments. This data is for illustrative purposes only.
Source: Bloomberg, Burgiss, Ares. Public equities are represented by the S&P 500 Index; Private equity is represented by the Burgiss U.S. Buyout Index; and Secondaries are represented by the Burgiss Global Equity Secondaries Index. Performance for the period 1992-2021.
Private credit1 has delivered sustained yield with relatively low credit risk
Private credit has delivered +300 bps in yield premium and historically better risk-adjusted yields.
As of December 31, 2022. For illustrative purposes only. *Portfolio yields are representative of a gross portfolio at each data point in time and do not represent a return to investors. Private Direct Lending represented by the Cliffwater Direct Lending Index (“CDLI”). The CDLI seeks to measure the unlevered, gross of fees performance of U.S. middle market corporate loans, as represented by the underlying assets of Business Development Companies (BDCs”), including both exchange-traded and non-traded BDCs, subject to certain eligibility requirements. The CDLI is asset-weighted by reported fair value. High Yield Bonds are represented by the ICE BofA US High Yield Constrained Index (“HUC0”). Leveraged Loans are represented by the Credit Suisse Leveraged Loan Index (“CSLLI”).
1 Private Credit can encompass direct lending, alternative credit, infrastructure debt, real estate debt and/or distressed debt/special situations.
Private real assets have delivered downside protection and diversification
Private real assets have experienced shallower drawdowns and have a correlation to public equities of 0.10 or less.
As of March 15, 2022. Sources: NCREIF, EDHEC, U.S. Bureau of Labor Statistics. Private real estate represented by the NCREIF ODCE index. Public real estate represented by FTSE NAREIT All Equity RE Index. Private infrastructure is represented by the EDHEC Broadmarket unlisted infrastructure equity, value-weighted (capped) (USD). Public infrastructure is represented by the S&P Global Infrastructure Total Return index. There are many differences between private and public market investments. This data is for illustrative purposes only.
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AccessAres is the thought-leadership and educational division of Ares Wealth Management Solutions. The materials distributed by AccessAres are for informational purposes only and do not constitute investment advice or a recommendation to buy, sell or hold any security, investment strategy or market sector. Ares Wealth Management Solutions is a global brand of Ares Management Corporation.
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AccessAres is the thought-leadership and educational division of Ares Wealth Management Solutions. The materials distributed by AccessAres are for informational purposes only and do not constitute investment advice or a recommendation to buy, sell or hold any security, investment strategy or market sector. Ares Wealth Management Solutions is a global brand of Ares Management Corporation.
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AccessAres is the thought-leadership and educational division of Ares Wealth Management Solutions. The materials distributed by AccessAres are for informational purposes only and do not constitute investment advice or a recommendation to buy, sell or hold any security, investment strategy or market sector. Ares Wealth Management Solutions is a global brand of Ares Management Corporation.