
Comparison of public and private markets
sector exposure by region
Note: Private equity backed company sector exposure is measured as the percentage of total deals in each sector in a given region. Public equity sector exposure is the sector weights of each of the indexes.
Key takeaway
Private equity can provide complementary exposure to public markets.
When comparing the private equity market to public equities, we observe significant differences in sector exposures. For investors, we believe that adding a private equity allocation within their overall equity portfolio can provide complementary exposure to public markets.
There is significant variance in sector exposures between public and private equity markets. PE tends to have more exposure to technology, health care, and industrials, and less exposure to sectors like materials, utilities, and energy.
Take technology in Europe as an example. Only 8% of the European public equity market is tech stocks, and over half of that exposure is in industries requiring high capital investment like semiconductors, hardware, and equipment. In contrast, tech represents 25% of European private equity investments and our research has found that private European tech is comprised almost entirely of software and software services companies.
By adding private equity to a public markets portfolio, an investor can gain exposure not just to either or, but to the full set of growth opportunities driving the global economy.
The HarbourVest advantage
- Defined as the sum of the absolute differences between private/public sector exposures.
Other includes Energy, Materials, Real Estate, Utilities. Source: MSCI Private Capital Solutions, MSCI. Public index sector exposure as of December 31, 2024. Private markets sector composition as of September 30, 2024.
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