Does Private Equity Outperform the Market?

According to a new study by Chris Higson, professor of accounting at the London Business School, private equity returns over a 25-year period did not surpass the overall market. Here is an excerpt from an article in the Wall Street Journal about Higson's findings:

The majority of private-equity investors made "at best a market return" between 1980 and 2005, according to research by a London Business School professor. Chris Higson, professor of accounting at the London Business School, compiled previous findings by academics on global returns from private-equity funds from 1980 through to the early 2000s. He said that the research found there was a significant split among private-equity investors. While the top 25% of funds outperformed the public markets during this period, the remaining 75% of funds underperformed.