Private equity investments have underperformed compared to the S&P 500 in 2024, with returns lagging by over 12 percentage points. This marks the first time in nearly 25 years that private market funds have underperformed large-cap US stocks across multiple time horizons, including 1, 3, 5, and 10 years. The underperformance is attributed to a slowdown in private equity dealmaking activity and the illiquidity drag associated with these investments. One of the largest US public pension funds, a major and longstanding investor in private equity, is seeking to exit these investments even at a loss from booked values, raising concerns about the value proposition of private equity given its high expenses and lower returns compared to low-fee equity index mutual funds. Moody’s has issued warnings about Wall Street's efforts to sell private equity and private debt funds to retail investors, highlighting risks of overheating financial markets and potential misalignment of interests. The growing push to attract retail money into private markets could pose risks to investors, private funds, and the broader financial system. This critical view is echoed in recent literature and podcasts, including discussions by author Megan Greenwell, who critiques how buyout firms have negatively impacted economic opportunities for the average American. The private equity sector faces increasing scrutiny amid mounting secondary sales by pension and endowment limited partners, which may disadvantage retail investors entering the asset class.