Private Equity - Industry - Global Market, Share and Trends 2023-2028

Summary of Private Equity

The global private equity industry has seen tremendous growth over the past decade to reach its current size of over more than $4 trillion in 2021 annual revenue according to industry research. The United States represents the largest national private equity market at an estimated $1.5 trillion annually, with Europe and Asia also contributing major shares of over– $800 billion and $500 billion respectively. This reflects the success many firms have experienced in raising larger and larger funds, with some mega-funds now managing in excess of $250 billion individually. The report shows — forecasts for global private equity to reach –US$7.6 trillion in assets under management by 2027 growing the CAGR 10.1%. This growth shows no signs of slowing as institutional investors continue allocating more capital to alternative assets.

Management fees and carried interest payments earned by GPs have steadily increased in turn, driving strong profitability within the sector. Looking ahead, most analysts project the private equity asset class will maintain growth rates averaging over 10% each year, supported by pension funds and other limited partners seeking higher returns than public markets. Competition for attractive deals remains fierce, pushing up valuations, but large firms are well-positioned to deploy ever-larger funds into both new and follow-on investments globally. Based on our estimates, we can say that the global Private Equity industry is forecasted to be a $6311.40 billion industry in 2029 from $4,300 billion in 2023 with a CAGR of 6.50%.

Recent Trends and Insights

Large fund sizes: Private equity firms continue to raise larger funds, pursuing bigger deals. Many mega-funds now actively raise $10 billion or more, requiring each fund to generate substantial returns.

Technology focus: Private equity firms have been actively allocating more of their funds to technology companies. Areas like software, internet, fintech and healthcare IT have attracted significant PE investment in recent years.

Environmental, social and governance (ESG) priorities: Sustainable investing is becoming a higher priority. More GPs actively evaluate ESG factors when selecting and supervising portfolio companies. Some have even actively raised ESG-focused funds.

Geographical expansion: US-based firms are actively investing more outside their home market, including in Asia and other emerging regions with high growth potential. Cross-border deals have also increased.

Leveraged buyouts slowing: After reaching a peak in 2007, private equity firms have pursued less risky strategies like growth equity and infrastructure investing, as the number of large leveraged buyout transactions has declined.

Competition for deals: With so much capital available, private equity firms actively face stiff competition to acquire attractive companies. This is pushing up valuations and deal multiples. Firms need to be highly selective and move quickly.

Product Insights

Buyout funds remain dominant: Buyout funds account for around 65% of capital invested globally. However, other strategies like venture/growth, distressed, and turnaround funds are gaining more attention.

Large buyout funds see success: Large buyout funds of $10 billion or higher in size have actively seen strong fundraising success in recent years. However, some “mega-funds” of $20 billion+ have struggled to deploy capital effectively.

Venture capital focuses on late-stage: Venture capital investment is increasingly focused on late-stage deals rather than seed/early-stage startups. Firms actively seek companies with proven business models and strong growth potential.

Distressed funds benefit from downturns: Distressed private equity and special situations funds have actively benefited from economic downturns, pursuing turnaround situations and bankruptcy opportunities.

Infrastructure draws huge sums: Infrastructure as an asset class has actively drawn huge sums, with over $300 billion committed to infrastructure funds in 2021. Renewable energy is a particularly attractive sector.

Secondaries and co-investments diversify efficiently: Secondaries and co-investment funds actively allow LPs to diversify within private equity more efficiently. These products saw record fundraising in 2022.

ESG-focused funds grow fast: ESG-focused funds are a fast-growing segment as more LPs and GPs actively prioritize sustainability. However, strategies vary in rigor of ESG implementation.

Key Companies

Some major players within this vast domain of industry are

• Blackstone Group
• The Carlyle Group
• KKR & Co. Inc.
• Apollo Global Management
• Thoma Bravo
• Bain Capital
• CVC Capital Partners

Regional Analysis

North America attracts over $500 billion: North America attracted over $500 billion in PE investments in 2021, far outpacing other regions. However, Asia is the fastest-growing region.PE deals in Asia total $240 billion: Private equity deals in Asia actively totaled $240 billion in 2021, up 25% from 2020. China accounted for $98 billion of Asian PE investments.

European buyout firms invest $275 billion: European buyout firms actively invested $275 billion across borders in 2021, up from $225 billion in 2020 as firms pursued over $50 billion worth of US deals.

Latin America rebounds strongly: Latin America saw $47 billion in PE investments in 2021, rebounding strongly from the pandemic.

Middle East PE deals total $10.3 billion: Middle East PE deals actively totaled $10.3 billion in 2021.Sovereign wealth funds allocate $1 trillion: Sovereign wealth funds from the Gulf and Asia have become major limited partners with $1 trillion in private market allocations.

Market Segmentation

By Type:

• Buyout funds
• Venture/growth capital
• Distressed/turnaround
• Mezzanine
• Infrastructure

By End User:

• Institutional investors (pension funds, sovereign wealth funds, endowments)
• High-net-worth individuals
• Corporations (corporate venture arms)

By Enterprise Size:

• Large Industries
• Small & Medium Industries

By Region:

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East and Africa

Our Methodology

We have offered a well-founded review of the Private Equity Industry market along with ongoing trends and upcoming projections to highlight proximate investment opportunities in this report. Moreover, an extensive analysis of any future prospects, challenges, competitors, or navigating aspects is also provided. A methodical detailed regional examination is presented.

Primary Research  

Our multi-pronged research approach includes interviews with industry leaders and a global survey of advanced manufacturing professionals to gain qualitative insights. We utilize our proprietary databases encompassing key performance indicators worldwide in order to collate relevant data points. A multivariate forecasting framework considering historical performance, current dynamics and qualitative factors are utilized to develop market sizing and growth projections through 2029.

We supplement our primary research with a careful examination of secondary materials such as– case studies, news stories and references from other sources. Organizations can benefit from the strategic advice and conclusions offered because they will be better equipped to respond to the dynamic nature of this industry and seize emerging possibilities.

We employ a comprehensive and iterative research methodology focused on minimizing deviation to provide the most accurate market estimates. Our research utilizes a combination of bottom-up and top-down approaches across segments and utilizes databases, primary research insights and industry experts for analysis.

Raw data is obtained from multiple sources and thoroughly filtered to ensure only authenticated and validated sources are considered. We collect data from raw material suppliers, industry associations, technology providers, and buyers to gain a holistic perspective.

Quantitative Analysis

Our market estimates are derived through statistical models, beginning with collection of historical data and analysis of macro- and micro-economic factors influencing the market. Gathered information on market dynamics, technology and pricing trends are utilised to build the models.

Econometric and technological models are applied to project short- and long-term market potential respectively. A bottom-up approach is preferred to minimize errors. Key parameters considered include market drivers and restraints, material pricing trends, regulatory scenarios, and capacity additions.

Weights are assigned to these parameters based on impact analysis and market forecasting is performed via statistical tools and techniques. We believe this methodology results in an accurate and realistic market picture.