HarbourVest Private Equity Benchmarks: Software Repricing Drives Negative Q1 2026 Buyout Returns

The software-heavy Information Technology sector weighed on private equity returns in the first quarter of 2026, as the public market selloff in Software as a Service (SaaS) equities extended into private portfolios, according to the latest investment-level benchmark data from private markets investment firm HarbourVest Partners. The HarbourVest Private Equity Global Buyout Benchmark posted a -1.6% return for the quarter, driven by declines in Information Technology investments, which represent the largest sector in the benchmark (~29% weight by current value as of March 31, 2026).

HarbourVest’s proprietary investment-level benchmarks are built on data from more than 66,000 underlying private equity and venture transactions. The newly published data include trailing one-, five- and ten-year returns through March 31, 2026.

A closer look at the investment-level data that is the foundation of the HarbourVest Private Equity Benchmarks shows the effect can be isolated with precision: on a quarter-over-quarter basis, Information Technology recorded a -5.0% return. By comparison, most other sector returns dipped slightly at 2% or less, with Industrials generating positive performance for the quarter.

Within the Information Technology sector, Software & Services bore the brunt of the fallout from the public SaaS multiples compression, slipping to -6.4% for the quarter and 0.1% for the trailing year, while remaining the top industry group for the trailing 10 years with a 21.9% annualized return.

“The first quarter returns predominantly tell a software story, since the Software & Services industry comprises the majority of the benchmark’s largest sector – Information Technology,” said Sofia Gertsberg, Managing Director and Head of Quantitative Investment Science at HarbourVest Partners. “Some of the Q1 2026 SaaS sector repricing in public markets was reflected in our buyout benchmark returns this quarter. The ability to attribute this impact precisely at the underlying investment level gives investors far more visibility and transparency into what drives private equity returns.”

Software Repricing Drives the Technology Move

In the US, where Information Technology dominates the benchmark (32% weight), trailing one-year Information Technology returns turned negative at –2.2%, a clear indicator that the public market SaaS repricing had reached private portfolios. Information Technology stayed positive in Global ex-US (14.6%) and Europe (11.1%) buyouts.

“The first-quarter headline masks a highly idiosyncratic market,” said Scott Voss, Chief Market Strategist, HarbourVest Partners and co-author of HarbourVest’s 2026 Mid-Year Private Markets Outlook. “Software fell while hardware rose, and US technology diverged sharply from markets outside the US. The lesson is that aggregate returns and broad sector labels can conceal more than they reveal. Understanding private-market performance increasingly requires looking through the benchmark to the industries and businesses underneath it.”

Financials were the one-year standout sector in the US, generating a 15.8% return. Outside the US, Communications Services outperformed, with 15.4% and 14.8% one-year returns for Global ex-US and Europe buyouts respectively.

A Closer Look at PE Performance Drivers and Benchmark Construction

The transparency of the HarbourVest Private Equity Investment-level Benchmarks allows for a granular, data-driven analysis of private market performance drivers over multiple time horizons. As detailed in the table below, over the past decade Information Technology outperformed other sectors, moderated after the 2021 peak, and gave back a portion of that accumulated gain in the first quarter of 2026—the first time the public market repricing of software is visibly realized in the private equity benchmarks.

The newest data also provide greater transparency into the concentration and composition of private versus public equity benchmarks. The HV Global Buyout Benchmark’s top 10 underlying company holdings represented approximately 5.0% of total benchmark value as of March 31, 2026, while in the Information Technology sector the top 10 holdings accounted for 10.8%. In comparison, the public market was significantly more concentrated with the top 10 companies accounting for 28.4% of the market capitalization of MSCI ACWI, and nearly 70% of the MSCI ACWI Information Technology sector.

Sector composition at the investment level also helps to explain the first quarter’s sharp divergence in private and public technology stories.

Software & Services investments comprise roughly 27% of the exposure in the HarbourVest Global Buyout Benchmark—it is the single largest industry group. Public technology indices carry far more in semiconductors and hardware, which rallied on AI demand, while software repriced. That difference explains why public market Information Technology indices rose over the trailing year while the software-heavy private equity benchmark did not. This underscores that the two markets are measuring different underlying businesses underneath the same sector label.

About the HarbourVest Private Equity Benchmarks

HarbourVest’s proprietary benchmarks, created by the firm’s Quantitative Investment Science group, track the performance of PE and venture-owned companies. HarbourVest releases benchmark performance for companies in the following categories: (i) Global Buyouts; (ii) US Buyouts, a subset of the Global Buyouts category; (iii) US Venture Capital; (iv) Global ex-US Buyouts, a subset of the Global Buyouts category; and (v) Europe Buyouts, a subset of the Global Buyouts category. An investment benchmark is similar to a scorecard, used to measure how well an investment is performing compared to a relevant counterpart. The HarbourVest benchmarks are based on HarbourVest’s proprietary dataset of over 66,000 investments that have been held in PE funds, representing more than $3.8 trillion of capital invested collectively as of March 31, 2026. We believe these benchmarks can provide recipients with differentiated information based on extensive private deal data and cash flow history, enabling transparency into performance drivers to provide more granular insights than is available with traditional PE benchmarks.

Disclosures:

HarbourVest Private Equity Benchmarks. Market analysis is not representative of any HarbourVest product: The HarbourVest Private Equity Benchmarks reflect a compilation of PE partnership and transactional data drawn from internal and external sources and related estimated valuations of such companies by HarbourVest for the illustrated period (which in turn are based on HarbourVest’s subjective assumptions). Returns are not representative of any HarbourVest fund or account, and are not representative of any HarbourVest investment experience. Returns are gross of management fees and carried interest. The HarbourVest Private Equity Benchmarks data universe information has been developed internally based on information obtained from sources believed to be reliable; however, HarbourVest does not guarantee the accuracy, adequacy or completeness of such information or HarbourVest’s related valuation estimates or assumptions, which may be materially inaccurate. The HarbourVest Private Equity Benchmarks are intended to be representative of the broader PE market and do not reflect any views, analysis, or recommendation by HarbourVest with respect to any particular investment and are not representative of the investment performance of any HarbourVest investment or the experience of any investor in any HarbourVest product.

Past performance is not indicative of future results.

HarbourVest Partners, LLC (“HarbourVest”) is a registered investment adviser under the Investment Advisers Act of 1940. This material is solely for informational purposes and should not be viewed as a current or past recommendation or an offer to sell or the solicitation to buy securities or adopt any investment strategy. The opinions expressed herein represent the current, good faith views of the author(s) at the time of publication, are not definitive investment advice, and should not be relied upon as such. This material has been developed internally and/or obtained from sources believed to be reliable; however, HarbourVest does not guarantee the accuracy, adequacy or completeness of such information. The information is subject to change without notice and HarbourVest has no obligation to update you. There is no assurance that any events or projections will occur, and outcomes may be significantly different than the opinions shown here. This information, including any projections concerning financial market performance, is based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons.

The HarbourVest Global Buyout Benchmark seeks to measure the performance, gross of fund fees, expenses and carried interest, of buyout investments made by private equity funds in private companies globally.

The HarbourVest U.S. Buyout Benchmark seeks to measure the performance, gross of fund fees, expenses and carried interest, of buyout investments made by private equity funds in private companies that are based in the United States.

The HarbourVest Global ex-US Buyout Benchmark seeks to measure the performance, gross of fund fees, expenses and carried interest, of buyout investments made by private equity funds in private companies globally, including developed and emerging markets, excluding companies based in the United States.

The HarbourVest Europe Buyout Benchmark seeks to measure the performance, gross of fund fees, expenses and carried interest, of buyout investments made by private equity funds in private companies that are based in Western and Eastern Europe and the Nordics.

The MSCI AC World® Index (ACWI) is designed to measure the performance of publicly-traded large and mid-capitalization equity securities in global developed and emerging markets. The MSCI ACWI Index is maintained by Morgan Stanley Capital International (“MSCI”) and has historically captured approximately 85% coverage of the free float-adjusted market capitalization of its publicly-traded global equity opportunity set.

About HarbourVest Partners

HarbourVest is an independent, global private markets firm with 44 years of experience and more than $160 billion assets under management as of March 31, 2026. Our interwoven platform provides clients access to global primary funds, secondary transactions, direct co-investments, real assets and infrastructure, and private credit. Our strengths extend across strategies, enabled by more than 1,200 team members across Asia, Europe, and the Americas.

¹Source: HarbourVest. Presented in USD, gross of fees and carried interest, as of 3/31/2026.

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