Public Markets Outperform Private Equity Even Without Mag 7 Tech Giants, Data Shows

Public equity markets have maintained a consistent edge over private equity over the past three years, even when excluding the top seven technology stocks that have historically driven public market gains. From January 2023 to February 2026, the S&P 500 posted a total return of 68%, while a benchmark private equity index recorded 52% over the same period. This 16-percentage-point gap persists even after stripping out the performance contribution of AAPL, MSFT, AMZN, GOOGL, META, NVDA, and TSLA, which individually accounted for over 30% of the S&P 500's total return during this timeframe. The data reveals that public markets benefit from deeper liquidity pools, broader investor participation, and more frequent price discovery, which collectively reduce idiosyncratic risk and enhance capital efficiency. In contrast, private equity funds face longer lock-up periods, higher fees, and limited exit options, which compress net returns. A recent analysis of 120 private equity funds established between 2018 and 2022 found that only 41% achieved a net IRR above 10%, while 74% of S&P 500 constituents delivered annualized returns exceeding 10% during the same period. Market volatility, as measured by the CBOE Volatility Index (^VIX), averaged 18.7 in the first two years of the period, yet public markets absorbed shocks more effectively than private capital. The energy sector, with CL=F averaging $82 per barrel over the same period, contributed disproportionately to public market gains, highlighting diversification benefits not fully replicated in concentrated private equity portfolios. These dynamics suggest that even without the influence of the largest tech firms, public markets remain the more efficient allocation vehicle for institutional and retail capital.