In private markets, the difference between stronger and weaker managers has been wide, and it has run in both directions. Figures reported by J.P. Morgan Asset Management show a top-quartile private-equity result alongside negative bottom-quartile results in venture capital and non-core real estate over the same long window. That spread is a reason that manager selection is a discipline.
The spread runs both ways
J.P. Morgan Asset Management's Portfolio Discussions — Alternatives, for the first quarter of 2026, presents 10-year manager-quartile results in Exhibit 3, on page 9 of the firm's Guide to Alternatives, with data as of 31 January 2026. The exhibit, drawing on Burgiss, Morningstar, MSCI, PivotalPath and J.P. Morgan Asset Management, reports a 20.8% 10-year internal rate of return for the top quartile of private equity, ending in the third quarter of 2025, alongside a −3.3% 10-year internal rate of return for the bottom quartile of venture capital and a −5.0% 10-year internal rate of return for the bottom quartile of non-core real estate, each also ending in the third quarter of 2025 [1]. These are historical results as reported in that exhibit. Past performance is not indicative of future results. A top-quartile figure is not a typical result, and it is not a result that any given manager, including any manager a reader might later consider, will repeat.
The same exhibit places large-capitalisation public equities, measured as annual returns over a 10-year period ending in the fourth quarter of 2025, in a tighter labelled band of 9.0% and 11.6% [1]. The comparison is of different measures over slightly different end dates, and it should be read in that light. The point for this article is the width of the private-market spread, in both directions, not a claim that one asset class will outperform another.
Why the gap is wide
Private-market outcomes depend on a small number of companies, on the price paid, on leverage, on the path of the business under the manager's ownership, and on when and how an exit is achieved. Information is thinner than in a public market. Holdings cannot usually be sold at will. Fees and carried interest reduce what the investor receives. Valuation between transactions is an estimate. In a market with those features, a weaker manager can deliver a material loss, just as a stronger manager can deliver a stronger result. Neither outcome is guaranteed, and neither is a reason to treat any past figure as a forecast.
Selection is the work, not a formality
The width of that spread is why manager selection and ongoing review are a professional discipline, not a paperwork step. In the UBS Global Family Office Report 2025, 40% of surveyed family offices named manager selection and/or active management as a top diversification method [2]. That is a description of practice in a client sample. It is not evidence that selection will produce a top-quartile result, and it is not a recommendation of any manager.
Illiquidity, fees and the risk of loss of capital remain, including for interests in well-known managers. Reading managers the way an owner or an acquirer would read a business — including the possibility that the outcome is poor — is a research task, and a cross-border one for investors outside the United States. It is work for a specialist partner who brings that owner's lens, and who can apply it across borders and languages.
Key takeaways
- The width of that spread, in both directions, is a reason that manager selection is a discipline, not a formality.
- Private-market results depend on a small number of companies, on price, leverage, ownership and the timing of an exit. Fees, illiquidity and the risk of loss of capital apply in every case.
- Reading managers as an owner or an acquirer would read a business is a research task, including the possibility that the outcome is poor.
Sources
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