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The Private Equity Market size is projected to reach a value of USD 913.1 billion at a CAGR of 10.44% between 2023 and 2028. Market growth hinges on various factors such as the surge in global private equity transactions, the consistent returns associated with private equity investments, and the expansion of security trading activities. This uptrend in private equity deals worldwide reflects heightened investor interest in alternative investment opportunities. Moreover, the stability and steady income generated by private equity investments attract a diverse range of investors seeking reliable returns. Concurrently, the growth in security trading activities contributes to market expansion by fostering liquidity and facilitating efficient capital allocation. These factors collectively drive the growth trajectory of the market, underpinning its resilience and appeal to investors. Furthermore, the report includes historic market data from 2018 to 2022.
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In the private equity industry overview, diversification across investment classes appeals to ultra-high net worth individuals (UHNIs) and high net individuals (HNIs), particularly in the vibrant start-up culture. Notably, RIL group companies and alternative investments witness a surge, driving the demand for private equity investments. Amidst an industry overview, attention shifts to average deal size, highlighting the sector's dynamic nature and the quest for lucrative opportunities.
Further, this market research report extensively covers market segmentation by end-user (privately held companies and start-up companies), application (leveraged buyouts, venture capital, equity investment, and entrepreneurship), and geography (North America, Europe, APAC, Middle East and Africa, and South America).
The market share by the privately held companies segment will be significant during the forecast period. Privately held companies dominate the market. Fixed-income private equity is a type of bond fund that invests in various fixed-income securities, such as corporate, municipal bonds, and treasury bonds, on the stock exchange. Fixed-income private equity operates on a centralized stock exchange, unlike most corporate bonds. Most corporate bonds are sold by bond brokers, which limits the exposure of bond buyers to the stock exchange. On the other hand, bond buyers have the option to get enough exposure to the stock exchange with fixed-income private equity.
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The privately held companies segment was valued at USD 652.10 billion in 2018. Moreover, private equity provides a fixed, regular return on a fixed time period, similar to fixed deposits of a bank. Therefore, it allows new buyers to shift from fixed deposits to fixed-income securities to get an understanding of the stock exchange. Such factors are expected to drive the growth of the market during the forecast period.
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North America is estimated to contribute 33% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The market in North America has accounted for a major market share in 2022. This rise is attributed to continuous trading activities in the region and the large presence of the equity market in the US. As most investors on the stock exchange are cost sensitive, they look for low-cost brokerage options. This makes more buyers invest in private equity to eliminate the cost of brokerage commissions. This should increase transparency in trading activities and allow easy communication between traders. Moreover, as liquidity in some fixed-income markets has declined, investors are showing more interest in private equity security. Such factors are expected to drive the growth of the regional market during the forecast period.
The PE industry is leveraging its value-creating capabilities to drive growth investments across various sectors. As an attractive investment avenue, it explores strategic pathways to enhance the performance of portfolio companies in areas like energy & power. The industry relies on skilled professionals to navigate the complexities of environmental, social, and governance (ESG) criteria, ensuring sustainable and ethical practices. Key catalysts such as the globalization of capital and investments are reshaping the landscape, with sovereign wealth funds and pension schemes increasingly participating in this dynamic field. By focusing on these elements, the PE industry aims to deliver significant returns while addressing global challenges and opportunities in the investment ecosystem. Private equity firms are increasingly investing in e-commerce, media and entertainment, and real estate sectors to capitalize on emerging opportunities and drive growth across these diverse industries.
An increase in private equity deals across the globe is a key factor in the growth of the market share. Many of the larger transactions relied on strategic alliances. For example, Blackstone partnered with Thomson Reuters to carve out its financial and risk business into a USD20 billion strategic venture, with Blackstone and its co-investors owning 55% and Thomson Reuters owning the remaining 45%. Bpifrance and Blackstone Group each managed 17 buyout private equity transactions. For the first nine months of the year, private equity investment in India totaled USD12.8 billion. The deal flow in 2019 has been strong, with each successive quarter outperforming the previous one.
Further, the founding of Perspecta, which combined the US public sector business of DXC Technologies with Vencore and KeyPoint Solutions, and the acquisition of General Dynamics CSRA. It is the biggest deal of the year, valued at USD 9.7 billion. Veritas has acquired PwC as a guide for public sector business. Therefore, the increase in the number of private equity transactions globally is expected to drive the growth of the market during the forecast period.
The rising number of high-net-worth individuals (HNWIs) globally is the primary trend in the market growth. In recent years, the number of HNWIs around the world has increased. HNWIs typically have a net worth of at least USD1 million in cash or cash equivalents. These HNWIs are offered special services such as investing in reputable private equity and venture funds and the opportunity to obtain a portion of each company's pre-IPO investment and pre-ICO sales.
Additionally, at the level of larger investments and assets, HNWIs require sophisticated and tactical services to direct their finances. These HNWIs rely on wealth managers or wealth advisors who specialize in their respective fields to manage their portfolios, estate planning, asset protection, and tax management. Such factors will promote the growth of the market during the forecast period.
Transaction risks are a major challenge for the global growth of capital investment markets. Transaction risks arise when a company makes financial transactions or holds accounts in a currency other than its underlying currency. The risks that a company faces when conducting financial transactions between countries are called transaction risks. The risk is that the exchange rate will change before the transaction is completed. The duration between transaction and settlement is essentially a source of transaction risks.
Additionally, forward contracts and options can be used to reduce transaction risks. In general, when selling equity investments, a profit can be made if the foreign currency has appreciated against the dollar. On the other hand, if the currency or the underlying index falls against the dollar, it will result in a loss. Such transaction risks may hinder market growth during the forecast period.
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Advent International Corp. - The company offers solutions for private equity to well-positioned companies with operational and strategic improvement potential and partners with management teams to create sustainable value through revenue and earnings growth.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
In the realm of market, value creation thrives on leveraging next-generation technologies such as data analytics and artificial intelligence (AI) to drive automation across diverse industries like healthcare, renewable energy, and consumer goods. Amidst consolidation and disruption, firms focus on operational improvements and impact investing to navigate macroeconomic uncertainties and regulatory complexities. Strategic partnerships and intervention by government regulatory authorities shape investor preferences, while geopolitical uncertainties and fluctuating interest rates underscore the need for risk-adjusted returns. Private equity firms and hedge funds actively seek contrarian investment opportunities amidst market inefficiencies, guided by tax policies and performance reports to optimize portfolio performance and capitalize on a broader pool of investment opportunities.
Further, in the dynamic world of private equity, firms navigate through a landscape shaped by technology and technological innovation, seeking to capitalize on sustainable finance and robust economic growth while adapting to escalating competition and market saturation. They scout for attractive deals amidst the intervention of government regulatory authorities and shifting investor preferences driven by institutional investors, pension funds, and endowments. Amid market volatility and changing economic conditions, private equity players focus on long-term value creation through streamlining operations and active management guided by experienced fund managers, mindful of fees and expenses. Utilizing alternative avenues and leveraging technology and communication, they strive for sustainable growth and success. Artificial intelligence (AI) and data analytics are revolutionizing industries by providing deeper insights and enabling more precise decision-making.
Moreover, Ultra high net worth individuals are increasingly investing in private equity funds that focus on established companies and early-stage startups within the tech sector. As digital disruption transforms industries, PE portfolio companies are leveraging blockchain and other technologies to stay competitive. Investors are navigating a low-interest rate environment and evolving borrowing environment to maximize investment activities. Leading players in the field are implementing zero landfill practices through recycling services and waste-to-energy solutions, aligning with ESG compliance and the integration of ESG factors into investment portfolios. However, heightened competition and evolving compliance requirements necessitate careful exit strategy considerations. The lock-in period for investments and the performance of mature tech companies influence these decisions. The focus on non-hazardous solid waste management and sustainable practices reflects a broader commitment to sustainable growth and responsible investment strategies.
Market Scope |
|
Report Coverage |
Details |
Page number |
165 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 10.44% |
Market growth 2024-2028 |
USD 913.1 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
8.64 |
Regional analysis |
North America, Europe, APAC, Middle East and Africa, and South America |
Performing market contribution |
North America at 33% |
Key countries |
US, China, Germany, Canada, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Advent International Corp., AHAM Asset Management Berhad, Allens, Apollo Asset Management Inc., Bain and Co. Inc., Bank of America Corp., BDO Australia, Blackstone Inc, Ernst and Young Global Ltd., HSBC Holdings Plc, JPMorgan Chase and Co., Morgan Stanley, MorganFranklin Consulting, Navy Federal Credit Union, Onex Corp., The Carlyle Group Inc., The Goldman Sachs Group Inc., THE PNC FINANCIAL SERVICES GROUP INC., and U.S. Bancorp |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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