Private capital returned 0.48 per cent in Q1 2026, compared to 2.86 per cent in Q4 2025, while the one-year return remained solid at 10.99 per cent, according to the State Street Private Capital Index Trends report.
However, public markets and large cap equities also showed signs of stress in Q1, with the S&P 500 declining 4.33 per cent and the Russell 2000 returning 0.89 per cent.
In the private markets, venture capital led with a 2.84 per cent quarterly return and 23.5 per cent over one year, substantially outperforming private debt (up 0.82 per cent) and buyout (declining 0.23 per cent) for the quarter.
Performance among sector-focused funds varied materially during the quarter. Energy funds were the clear standout, returning 7.75 per cent in Q1 2026.
This was the sector’s strongest quarterly result since its 12.55 per cent return in Q1 2022 and the fifth-highest quarterly return in the available history beginning in Q4 2014.
State Street noted that the two periods shared in common a sharp geopolitical shock affecting global energy supply.
In Q1 2022, Russia’s invasion of Ukraine intensified already-tight oil markets, lifting commodity prices and strengthening the cash-flow outlook for energy-related businesses.
In Q1 2026, military action involving Iran and the disruption of shipping through the Strait of Hormuz produced another significant supply shock. Brent crude rose from approximately $61 per barrel at the beginning of the year to $118 at quarter-end.
Industrials returned 2.95 per cent in the quarter, supported in part by the category’s exposure to infrastructure-focused funds, while health care gained 2 per cent. Both substantially outperformed the overall index, highlighting the relative resilience of infrastructure and health care investments during a more volatile macroeconomic environment.
Meanwhile, information technology declined 0.47 per cent, financials fell 1.3 per cent, and generalist funds were broadly flat at −0.02 per cent.
