Have U.S. elections had any effect on private equity performance?

In November 2024, U.S. voters will head to the polls to elect their president for the next four years, as well as members of Congress. With that prospect in mind, many investors are trying to assess how these elections might affect the performance of their portfolios.

In this paper we examine whether and how past U.S. elections have affected the immediate performance of U.S. private equity, and look at longer-term performance under different administrative regimes.

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Executive Summary

  • Using Burgiss quarterly private equity fund performance data back to 1984, we find that elevated election-year volatility appears to be attributable to economic and market events rather than the elections themselves.
  • We find a pattern of stronger performance in the fourth quarter, on average, which we can attribute in part to underlying patterns of stronger public-market performance, higher levels of distributions from private equity funds, and the majority of audits being based off fourth-quarter numbers; we find no relationship with whether a year included an election.
  • While we find a superficial suggestion that private equity performs more strongly under divided governments led by Democratic presidents, the finding breaks down under closer scrutiny: the cyclicality of the asset class is more obviously attributable to the general economic and market backdrop.
  • We conclude that, while investors may emphasize sector-specific investment themes based on the results of this November’s polls, there is little historical evidence that U.S. elections exert a predictable effect on broad equity market performance, public or private.

Have Markets Performed Differently Under Different Administrative Regimes?

Average calendar-year returns under respective administrative regimes, 1984 – 2023

Private Equity and the Polls

Average calendar-year returns under respective administrative regimes, 2000 – 2023

Average calendar-year returns under respective administrative regimes, 1984 – 2023

Source: Bloomberg, Burgiss, Neuberger Berman. Data as of May 1, 2024. Year 1999 is removed from the private equity results as an outlier, as the return was 99.6%.