Morris said private equity has outperformed public equities over more than 30 years using Cambridge Associates benchmarking data, but she drew parallels between the weaker performance of recent vintages (2021 and 2022) and prior peak periods such as pre-global financial crisis.
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She characterized the period since 2022 as shaped by rapid interest rate increases, high inflation, wars and geopolitical tension, and uncertainty—factors that translated into lower deal and exit activity and fewer funds being raised. Against that backdrop, she said the company’s performance since early 2022 tracked the Cambridge global private equity benchmark, which she described as a sign of resilience given the difficult environment.
Morris reviewed the portfolio’s composition, saying just over half is invested in direct holdings with the remainder in funds. She noted a tilt toward the mid-market (about half of the portfolio), with growth (18%) and venture (6%) also meaningful contributors. The portfolio is primarily exposed to North America and Europe, and technology and healthcare represent just over half of company exposure.
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She compared performance across two periods—2010–2020 and 2021–2025—saying the earlier decade produced “really solid” outcomes consistent with underwriting expectations for primaries and co-investments, while the more recent period reflects slower deployment in primaries and deployment into peak valuations in 2021–2022 followed by valuation moderation. Morris said direct strategies (co-investments and manager-led secondaries) deployed significant capital in the 2021–2022 vintages, with IRRs likely challenged by longer expected holding periods, though she said the company still expects good returns in multiple terms over time.
She added that holding multiples for companies in the portfolio have “largely reset to today’s valuation environment,” and that much of the recent period’s impact is already reflected in NAV. Within the unrealized portfolio, she said the 2021 and 2022 vintages represent almost half of paid-in capital, with overall returns for those cohorts around 1.3x and about a 10% IRR, compared with roughly 1.8x and 16% for the more mature 2010–2020 period.
Morris attributed part of the issue to the company’s historical tendency to operate with net cash, which led to recycling elevated distributions in 2021 and 2022 into higher-than-usual deployment. She said the trust moved into a geared position in 2024 for the first time.
Despite valuation pressures, Morris highlighted continued operational growth. For the direct portfolio, she cited 12% weighted average EBITDA growth. She also described the portfolio as highly diversified, with more than 500 companies representing about 80% of the portfolio and no single company above 2%.
For direct holdings, she reported an average valuation of about 15x EV/EBITDA (for companies valued on EBITDA) and net debt of 4.8x EBITDA. The average age of the portfolio has increased to 5.7 years due to longer holding periods, and she described write-downs over the past three years as limited, largely affecting a handful of companies that struggled under higher rates and debt costs.
Morris also walked through a “value bridge” analysis for direct investments from June 2024 to June 2025, in which operating performance contributed positively to value but was offset by higher net debt, multiple contraction, write-downs on certain assets, and a 4.8% foreign exchange headwind. She said increased debt was often used to fund add-on acquisitions within buy-and-build strategies, which can pressure margins during integration but may generate benefits later through synergies and cross-selling.
On liquidity, Morris said distribution rates have improved from a trough of 8%–10% and nearly doubled over 18 months, rising from 8% at the end of FY2024 (May 2024) to 15% by November 2025. She said financing coverage ratios, including undrawn coverage, were robust and that improving M&A and IPO conditions are supportive.
In a discussion of current themes, Morris said Pantheon has been engaging with software-focused managers to assess how artificial intelligence is reshaping software business models, creating winners and losers. She argued that “software isn’t dead,” but said pricing models may shift toward consumption-based approaches and that competitive moats based solely on code are weakening. She highlighted the importance of proprietary data, embedded workflows, and integrating AI tools into products as potential competitive advantages.
She said the portfolio’s technology exposure is about 34%, with roughly a quarter of the total portfolio in software; within that, she said only 14% is in buyout software businesses, with the remainder in growth and venture exposures that may be more oriented toward AI-led companies. She described software valuations around 19.9x–20x as reasonable for the portfolio, while noting it is too early to determine the full valuation impact of AI developments.
On private credit, Morris said the market is going through a recalibration as yields moderate, but she did not expect private credit challenges to inevitably weigh on private equity underwriting in the mid-market. She also noted the trust has no private credit assets, limiting direct exposure. On the Middle East, she said direct portfolio exposure appears limited, with monitoring focused on second-order effects such as energy prices, inflation, cybersecurity risks, and broader uncertainty.
In closing remarks, Morgan said the board is focused on implementation of the strategy changes, as well as capital allocation decisions between new investments and share buybacks. He said Pantheon International has repurchased more than £325 million of shares over the past three years. He also said the trust has reduced costs through lower interest costs on debt facilities and lower manager fees, and he emphasized continued shareholder engagement and expanded disclosure in reporting going forward.
Pantheon International Plc (PIN) is an investment trust that provides investors with differentiated access to a global, diversified portfolio of private equity-backed companies through a flexible and active investment approach. Through its commitments to some of the world’s best private equity managers that might otherwise be inaccessible to individual investors, PIN makes the private, public. Launched in 1987 and a constituent of the FTSE 250, PIN is a company of scale and one of the longest established private equity funds on the London Stock Exchange.
The article “Pantheon International Unveils Strategy Overhaul in Shareholder Webinar Amid Tough PE Market” was originally published by MarketBeat.
