Private Equity Market Size to grow by USD 734.93 billion between 2023-2027
According to a research report “ Private Equity Market” by End-user (Privately held companies, Start-up companies) Application (Leveraged buyouts, Venture capital, Equity investment, Enterpreneurship) Geography (North America, Europe, APAC, Middle East and Africa, South America)- Global Forecast to 2027 published by Technavio, the market size is estimated to grow by USD 734.93 billion, at a CAGR of 9.32% during the forecast period. In the private equity market, strategic alliances have been a key driver for larger transactions. For instance, Blackstone, in partnership with Thomson Reuters, established a USD20 billion strategic venture by carving out its financial and risk business. Blackstone and its co-investors held 55% ownership, while Thomson Reuters retained the remaining 45%. Bpifrance and The Blackstone Group executed 17 buyout transactions collectively. For the initial nine months of the year, private equity investment in India reached USD12.8 billion. The deal flow in 2019 has been robust, with each subsequent quarter surpassing the previous one. Notable transactions include the formation of Perspecta, which merged DXC Technologies US public sector business with Vencore and KeyPoint Solutions, and General Dynamics' acquisition of CSRA.
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By End-user, the Privately held companies segment is projected to dominate the market size in 2024
In the current market landscape, private equity firms are increasingly turning to special purpose acquisition companies (SPACs) as an alternative to initial public offerings (IPOs) due to heightened volatility and uncertainty in the IPO market. Leveraged buyouts (LBOs), which involve acquiring a company by borrowing a substantial amount of money secured against the combined assets of the two entities, remain a popular strategy. However, the rise of SPACs has led to an uptick in private equity involvement in this sector. Private equity firms are forming their own SPACs and utilizing them as exit routes for their portfolio companies, capitalizing on the surge in blank-check companies. This trend underscores the adaptability and innovation of private equity firms in navigating market conditions and maximizing value for their investors.
By Application, Leveraged buyouts segment is expected to hold the largest market size for the year 2024
In the private equity market, privately held companies represent a significant portion of the investment landscape. Among various investment vehicles, fixed-income private equity stands out as an intriguing option for investors. This type of private equity functions as a bond fund, investing in a diverse range of fixed-income securities, including corporate, municipal, and treasury bonds, on the stock exchange. Unlike traditional corporate bonds, which are typically sold through bond brokers, fixed-income private equity operates on a centralized exchange. This setup grants bond buyers increased exposure to the stock exchange, offering a more comprehensive investment experience. Additionally, fixed-income private equity provides a predictable, consistent return over a fixed time frame, akin to traditional fixed deposits in banks.
North America is forecasted to hold the largest market size by region in 2024
The private equity market in North America has experienced significant growth in 2022, accounting for a substantial market share. This expansion can be attributed to the region's continuous trading activities and the US's large presence in the global equity market, which held over 40% share as of August 2021. The launch of the S&P 500 Trust Private Equity in 1993 has further boosted the prominence of private equity stock exchange trading. Tax efficiency, transparency, and centralized access to stock exchange platforms make private equity an attractive investment option for cost-conscious investors on the exchange.
The Private Equity Market growth and forecasting report also includes detailed analyses of the competitive landscape of the market growth and forecasting and information about 20 market companies, including:
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Research Analysis Overview
Private equity (PE) is a financial services industry that involves managing and investing capital in private companies. Portfolio management is a crucial aspect of PE, which involves selecting, monitoring, and optimizing investments in the portfolio to maximize returns. PE firms engage in deal sourcing, identifying potential investments through various channels, including industry networks, intermediaries, and proprietary research. Technological advancements have significantly impacted PE, streamlining deal sourcing and due diligence processes. PE market participants face market uncertainty, regulatory reforms, and volatile public markets, requiring them to be nimble and adaptive. PE firms manage various fund types, including buyout, growth, and venture capital funds, with assets under management ranging from millions to billions of dollars. PE investments span across various sectors, including real estate, media and entertainment, e-commerce, and technology. The average deal size varies widely, from mega investments in RIL group companies to growth investments in start-ups. PE deals require rigorous due diligence to assess the potential risks and rewards. With low-interest rates, PE has emerged as an attractive alternative investment class for institutional and individual investors. The PE industry is subject to rules and regulations, which vary by jurisdiction, and investors must navigate these complexities to reap the rewards of this dynamic investment class. PE offers diversification benefits, allowing investors to spread their capital across various investment classes and sectors. Capital remains a key driver of PE activity, with firms continually seeking new opportunities to deploy their resources.
Market Research Overview
The private equity industry continues to evolve, driven by technological advancements and changing economic conditions. Portfolio performance remains a key focus for private equity firms, with fees and expenses under scrutiny. Performance reports show that private equity has outperformed public markets, especially in sectors like technology and communication. Hedge funds and institutional investors, including endowments and pension funds, prefer private equity for its potential for risk-adjusted returns and long-term value creation. Market volatility, economic conditions, and macroeconomic uncertainties create market inefficiencies and contrarian investment opportunities. Active management, operational improvements, and strategic partnerships are essential for private equity firms to succeed. Tax policies and regulatory complexities pose challenges, but attractive deals and technological innovation offer opportunities. Private equity firms are investing in diverse industries, from consumer goods and renewable energy to healthcare and technology. Automation, artificial intelligence (AI), data analytics, and next-generation technologies are driving value creation. The mature corporate landscape and robust economic growth provide a fertile ground for private equity deals. Despite market saturation, escalating competition, and fluctuating interest rates, private equity firms continue to seek out attractive deals. Private equity firms are also exploring alternative avenues, such as sustainable finance and impact investing. The industry faces regulatory reforms and volatile public markets, but the potential rewards make it an attractive investment class for financial services and real estate firms. RIL group companies, mega investments, growth investments, and recovery are all part of the private equity landscape. Start-up culture and investment classes like real estate, media and entertainment, e-commerce, and bonds offer diverse opportunities for investors. Due diligence, deal sourcing, and portfolio management are crucial for success in this complex and dynamic industry.
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