Over the last 10 years, how have U.S. private equity rates-of-return compared to U.S. stock market returns?

The correct answer indicates that U.S. private equity rates of return have not matched U.S. stock market returns consistently over the last decade. The performance of private equity can differ significantly from publicly traded stocks due to various factors including investment strategies, the illiquidity of private equity investments, and varying time horizons for returns.

Private equity often involves investing in companies that are not publicly traded, which can lead to higher risks and therefore potential higher returns; however, achieving this does not always correspond directly to stock market performance. Growth phases, market cycles, and the specific sectors where private equity firms invest play crucial roles in determining their returns relative to the broader market. As a result, while some periods might see private equity outpacing the stock market, others may see the opposite, leading to an overall conclusion that these returns have been variable rather than consistently equal or aligned.

Understanding these dynamics provides insight into why private equity performance isn't simply equated with stock market indices, which can be influenced by more immediate trends and liquidity factors present in public markets.