Rumi Mahmood, Research Director, MSCI Institute | Keith Crouch, Executive Director, MSCI Research & Development |
Wendy Hu, Vice President, MSCI Research & Development
Since 2010, MSCI private capital data has supported more than 95 academic papers written by over 140 researchers across 60 leading universities globally. From the University of Chicago and Oxford to Duke, Stanford, and the National Bureau of Economic Research (NBER), scholars have applied MSCI’s datasets to advance understanding of one of the world’s fastest-growing asset classes.[1]
What began as a foundational source of performance data has become a key resource for advancing research on private assets. Today, MSCI’s private capital universe is helping to answer complex questions about how private markets create value, manage risk, and influence the broader economy.
The shifting research frontier
Early academic work on private markets focused on the basics. Private assets were opaque, with limited disclosures and few reliable data sources. Researchers were largely trying to understand how private funds performed, what drove returns and how they compared versus public markets.
The introduction of the MSCI-Burgiss dataset made available through the Private Equity Research Consortium (PERC), enabled independent academic research to explore these questions with greater rigor. Because the data is sourced directly from limited partners, rather than self-reported by general partners, this offered a complete and survivorship-bias free record of fund cash flows and valuations. This foundation allowed academic researchers to measure performance and benchmark returns with confidence.
As private markets have expanded to more than 12 trillion dollars in assets, the research agenda has broadened and deepened[2]. Scholars now use MSCI data to study private credit as a rapidly growing segment, evaluate fund-level risk and diversification, and analyze how private markets interact with policy-oriented initiatives such as Small Business Investment Companies.
Beyond performance, new themes are emerging that reflect the evolution of private markets. Recent studies examine how technology and AI are transforming investment strategies, from automating fund analysis to improving portfolio monitoring. Other areas of research look at the rise of secondary and continuation vehicles and the growing link between private capital and broader economic innovation. Collectively, these studies show how private assets are becoming integral to understanding both financial markets and their broader economic and social impact.
Highlights from over a decade of academic research powered by MSCI Private Capital Data
Measuring true performance
In The Private Capital Alpha (Brown, Gonçalves, and Hu, 2024), the authors develop a framework to test whether private markets generate genuine excess returns once illiquidity and concentration risks are considered. Using data on more than 5000 U.S. funds from 1987 to 2022, they find that buyouts delivered a statistically significant annual alpha of around 2.5%, while venture capital showed higher potential returns with greater volatility. Real estate funds, by contrast, produced modest and statistically insignificant alpha.
Rather than comparing headline internal rates of return, the study models what a typical limited partner could achieve when allocating to illiquid funds within a diversified portfolio, offering a clearer view of how private assets contribute to portfolio performance. A related paper, Risk Adjusted Returns of Private Equity Funds: A New Approach (Korteweg, 2024), applies factor-based methods to MSCI data and reaches similar conclusions: average private equity returns reflect fair compensation for risk, while top managers continue to generate meaningful excess returns.
Private credit: high yields without free lunches
Private credit is now the fastest-growing segment of private capital. In Risk Adjusting the Returns to Private Debt Funds (Erel, Flanagan, and Weisbach, 2024), researchers analyze more than five hundred funds raised between 1992 and 2015 using MSCI data. They find that private credit funds provide high yields that offset their fees and risks, but they do not deliver statistically significant abnormal returns once both debt and equity factors are considered. The study concludes that private credit investors were compensated fairly for risk but not overcompensated.
Policy capital and market access
Public-private programs are also receiving new attention. In The Performance of Small Business Investment Companies (Brown, Robinson, Hu, and Volckmann, 2024), researchers combine survey data with MSCI fund-level information to evaluate the performance of the United States Small Business Investment Company (SBIC) program. They find that SBIC funds outperform comparable non-SBIC peers, with average net internal rates of return of 16.9% and multiples on invested capital of 2.3%. Even after adjusting for risk and leverage, SBICs generate public market equivalents greater than one, showing that public policy capital can be both impactful and financially effective.
Persistence, timing, and skill
Do top managers continue to outperform? In Has Persistence Persisted in Private Equity? (Harris, Jenkinson, Kaplan, and Stucke, 2023), the authors study nearly 2,400 funds across three decades. They find that persistence in venture capital remains strong but has weakened in buyouts since 2000 when investors rely on performance data available at fundraising rather than final results. Past success is therefore a weaker predictor of future outcomes, particularly in mature buyout markets.
Timing strategies show similar limits. In Can Investors Time Their Exposure to Private Equity? (Brown, Harris, Jenkinson, Kaplan, Robinson, and Hu, 2021), the authors find that even well-timed commitment strategies offer limited benefits when institutional investing constraints are factored in. The findings suggest that consistent diversification and careful manager selection outperform attempts to time the market.
New frontiers in data and liquidity
As technology reshapes research itself, academics are using alternative data to study private markets in real time. In Thematic Investing with Big Data: The Case of Private Equity (Phalippou, 2023), natural language processing is applied to millions of news articles to create a ‘listed private equity’ index that tracks the performance of private fund benchmarks with nearly 90% correlation. This innovation provides a liquid proxy for otherwise illiquid private market exposures, helping investors better manage allocation and liquidity risk.
Innovation and market risk
In Disruption and Credit Markets (Becker and Ivashina, 2022), researchers combine MSCI venture data with corporate bond and patent datasets to analyze how innovation affects credit risk. Industries experiencing high venture investment and initial public offering activity tend to face elevated corporate default rates in subsequent years. The findings show that innovation-driven disruption benefits entrepreneurs and venture investors but increases risk for established firms and their creditors.
From data to global insight
To bring these findings to a broader audience, MSCI has launched a new series of Theory Meet Practice videos, featuring conversations with leading academics behind this body of research. Each discussion aims to distil complex academic insights into practical takeaways for investors.
Together, these studies demonstrate a field in rapid transformation, driven by data, advanced methods, and a growing partnership between academia and the investment community. Through collaborations with institutions such as PERC and the MSCI Institute, MSCI connects rigorous academic inquiry with practical investor insights, ensuring that as private markets expand in scale and influence, they remain grounded in evidence, transparency, and rigorous research.
References
[1] MSCI acquired The Burgiss Group in 2023. References to MSCI data prior to the acquisition denote Burgiss data.
[2] MSCI Private Capital Benchmarks Summary Q2 2025