Software Repricing Drags Private Equity Returns into Negative Territory in Q1 2026 — HarbourVest Partners, LLC

Event summary

HarbourVest's Global Buyout Benchmark posted a -1.6% return in Q1 2026, driven by a -5.0% decline in Information Technology investments.
Software & Services, the largest industry group within Information Technology, fell -6.4% in Q1 2026.
US Information Technology returns turned negative at -2.2% for the trailing year, reflecting public market SaaS repricing.
Financials were the one-year standout sector in the US, generating a 15.8% return.
HarbourVest's benchmarks are based on data from over 66,000 private equity and venture transactions.

The big picture

The Q1 2026 decline in private equity returns highlights the growing interconnectedness of public and private markets, particularly in the software sector. As SaaS multiples compress in public markets, private equity portfolios with heavy software exposure face valuation pressures. The data underscores the need for granular, investment-level analysis to navigate the idiosyncrasies of private market performance, where aggregate returns can mask significant sector and regional disparities.

What we're watching

Sector Diversification: Whether private equity portfolios can mitigate software sector volatility through increased exposure to outperforming sectors like Financials and Industrials.
Market Repricing: The pace at which public market SaaS repricing continues to impact private equity valuations and deal activity.
Geographic Disparities: How US technology sector performance diverges from global ex-US and European markets, and the implications for global private equity strategies.