Private debt delivered returns of 1.88 per cent in the second quarter of 2026, underperforming wider private markets, according to new data from State Street.

The State Street Private Capital Index (SSPCI) recorded an overall return of 4.37 per cent during the quarter, up from 0.48 per cent in the first three months of the year.

The index’s one-year return stood at 11.8 per cent, compared with 7.07 per cent for private debt.

Private debt lagged both buyout and venture capital strategies during the quarter, which returned 2.99 per cent and 10.06 per cent respectively.

Venture capital was the strongest-performing asset class over the year, returning 30.38 per cent, supported by valuation growth in late-stage technology and artificial intelligence-related investments.

Performance varied across sectors, with information technology-focused funds returning 6.41 per cent, marking their strongest quarterly performance since the final three months of 2021.

Energy-focused funds returned 5.80 per cent, continuing their positive momentum from the previous quarter, while consumer-focused funds delivered the weakest sector performance at 0.8 per cent.

Regionally, US-focused private capital funds returned 5.03 per cent, compared with 4.17 per cent for funds focused on the rest of the world. European funds delivered returns of 1.24 per cent, up slightly from 1.15 per cent in the first quarter.

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