Lincoln Private Market: Software Decline, Stable May 7

The Big Picture

The Lincoln Private Market Index fell 2.2% in Q1, a drop led by software weakness that could reshape near-term private-market valuation references for late-stage deals. For investors tracking private-market exposure, the headline decline is sector-driven rather than a broad collapse, which changes how you might interpret private valuations versus public comps.

Lincoln International framed the quarter as a mixed picture: a notable pullback in technology, especially software, offset against otherwise stable trends across the private-market universe. That blend matters if you use private-market indices to benchmark pricing, carry valuations, or set expectations for fundraising and exits.

What's Happening

Lincoln International said the Lincoln Private Market Index, which tracks enterprise value changes for U.S. privately held companies, decreased in Q1 with the following specifics:

• The overall LPMI decreased by 2.2% in Q1, a headline signal for private-market enterprise values.
• Technology companies registered a 7.8% decrease, indicating the sector drove most of the quarter's weakness.
• Software companies were singled out with an 8.8% decrease, showing sharper compression inside tech.
• The report also notes a 1.5% decrease for another category mentioned in the release, underscoring pockets of softness beyond software.

Lincoln's release included additional metrics that investors should flag for follow-up analysis: 63.1%, 62.0%, 58.9% and 98.56%. The firm characterized these data points as part of the broader context behind the index movement. Taken together, the numbers show that the Q1 move was concentrated in a subset of assets rather than a uniform marketwide decline.

Compare this quarter to prior periods: Lincoln called the overall private-market trend stable despite the software-driven decline. That contrasts with quarters where broad-based weakness or strength pushed the index. For investors who benchmark private valuations against public peers, the takeaway is a selective reset rather than a sweeping rerating.

Why It Matters For Your Portfolio

This report matters because the LPMI is used by LPs, GPs and institutional allocators as a reference for private valuations and exit timing. A 2.2% overall decline concentrated in software can shift assumptions about exit multiples, carry calculations and mark-to-market adjustments in private portfolios.

Who should care: growth investors and allocators with private-market exposure, value-focused managers benchmarking pricing, and traders watching public tech proxies for sentiment. Public technology names can influence perceptions, so keep an eye on related public movers such as $AAPL and $NVDA for sentiment crossover into private fundraising and secondary markets.

Risks To Consider

• Sector Concentration Risk: Software drove much of the decline, so portfolios concentrated in software or late-stage tech face disproportionate valuation pressure.
• Liquidity And Mark Risk: Private valuations are less liquid and more model-dependent, which can amplify quarterly swings when one sector moves sharply.
• Macro And Exit Timing: A sector-led pullback can delay IPOs or M&A exits, compressing realized returns and changing fund cashflow expectations.

What To Watch Next

Investors should track several near-term indicators to understand whether the Q1 move is temporary or a developing trend.

• Next Lincoln LPMI updates and commentary from Lincoln International, which will clarify whether software weakness persists or reverses.
• Sector flows and fundraising updates in software and tech; watch for signs of slowing deal volume or widening bid-ask spreads in secondaries.
• Valuation multiple trends across cohorts, including any shifts in median enterprise-value-to-revenue or similar benchmarks highlighted in subsequent releases.

The Bottom Line

• The Lincoln Private Market Index fell 2.2% in Q1, primarily due to an 8.8% drop in software and a 7.8% drop in tech.
• Lincoln describes broader private-market trends as stable, suggesting the weakness is concentrated, not systemic.
• Monitor upcoming LPMI releases and sector-specific fundraising and exit activity to gauge persistence of the software pullback.
• Assess concentration and liquidity in private allocations; consider scenario planning rather than immediate portfolio changes.

FAQ

Q: What caused the LPMI's 2.2% drop in Q1?

A: The decline was driven mainly by a 7.8% decrease in technology and an 8.8% decrease in software, according to Lincoln International's report.

Q: Should private-market investors be alarmed by this report?

A: Lincoln framed broader trends as stable, so the report signals sector-specific weakness rather than a universal private-market collapse. Investors should review concentration risks and liquidity needs.

Q: What data should I watch next to reassess exposure?

A: Watch subsequent LPMI releases, sector fundraising and exit metrics, and valuation-multiple trends for software and tech cohorts to see if the weakness extends beyond Q1.