Buyout Funds Trail Venture on Decade Returns
A new Andreessen Horowitz report finds US buyout funds have lagged both venture funds and the broader stock index over the past ten years.
Updated on Nov. 5, 2026 in Investing
US buyout funds returned about 15% annually over the past decade, underperforming the Russell 3000 index, while US venture funds returned about 18% annually and beat the index by 2.3 percentage points. The findings come from an Andreessen Horowitz report published November 4, 2026.
Why it matters
Low interest rates helped underpin buyout returns in the past, but higher financing costs and acquisition prices that have not fallen are making those returns harder to achieve. The pressure is concentrated in deals made at elevated prices in 2021-2022, which now account for much of the debt at risk of foreclosure.
The report's return figures are 15% annually for US buyout funds and 18% for US venture funds over the past decade, with venture beating the index by 2.3 percentage points. Deals from 2021-2022 account for 70% of debt subject to foreclosure in 2025-2026, and the report does not say how many of those borrowers will ultimately default.
The players
Andreessen Horowitz
A Silicon Valley venture capital firm known for backing technology startups, which published the November 4, 2026 report comparing buyout and venture fund returns.
Golub Capital
A private credit firm that lends heavily to software companies backed by private equity, whose borrowers' revenue growth data is cited in the report.
The details
Rising valuation multiples accounted for more than half of buyout returns in the 2010s, but revenue growth among software borrowers financed by Golub Capital fell from 9% to below 3% over two years. Some borrowers can no longer pay interest in cash and are adding it to their loans, while the average time to exit has stretched to about seven years from five to six years in 2010-2021.
Timeline
2010-2021: Average time to exit was five to six years for buyout deals.
2015: A typical acquisition could return 2.5 times invested capital over five years with 5% annual EBITDA growth.
2021-2022: Acquisitions made at elevated prices that now face rate pressure.
2025-2026: Deals from 2021-2022 accounted for 70% of debt subject to foreclosure.
November 4, 2026: Andreessen Horowitz published its report 'Is Private Equity Cooked?'
Market Dynamics
The report ties the shift to the 2010s era of low interest rates, which it credits with underpinning buyout returns. Higher rates now apply to acquisitions made at elevated prices in 2021-2022, which the report links to much of the current foreclosure risk.
For investors weighing private equity exposure, the report suggests buyout returns may trail venture and public indexes, which matters for retirement and savings allocations. Those with exposure to funds that bought in 2021-2022 at elevated prices face the most rate pressure.
The takeaway
Investors comparing private equity with other options should look at how a fund's acquisition timing and leverage shape returns, not just its headline track record. Returns that relied on falling rates may not repeat in a higher-rate environment.
Further reading
Explore more on Investing for context on how fund returns compare across asset classes.
Source note: This article includes information reported by TokenPost.
