The demand for private equity has grown as a means to access opportunities not available in public markets. Although a robust IPO market has increased the number of listed companies in the past two years, it still remains below the levels of the 1990s as more companies remain private for longer.

Although to some extent small cap public equities have similar dynamics and opportunities to private equity, private equity tends to have more exposure to some of the higher growth sectors. As shown in the chart on the right, technology is double the weight in private equity as in the Russell 2000, which instead has greater weights to financials, real estate, and utilities.