Private Equity’s Growth Reshapes the US Investment Landscape

Morgan Stanley’s Michael J. Mauboussin and Dan Callahan examine the long-term shift of institutional capital from US public equities toward buyout and venture capital markets.

• US-listed companies have roughly halved since the mid-1990s, although public-market capitalization remains vastly larger than private equity.
• Private equity has delivered attractive long-term averages, but returns vary widely by manager and involve higher illiquidity, fees and valuation uncertainty.
• Higher rates and valuations mean future buyout returns may depend increasingly on operational growth rather than leverage and multiple expansion.

Explore the full report for a deeper assessment of public and private market opportunities.