Private Equity Market Size, Share, and Trends 2024 to 2033

Private Equity Market Size and Forecast

The global private equity market size was USD 492.82 billion in 2023, calculated at USD 540.72 billion in 2024 and is expected to reach around USD 1,246.08 billion by 2033, expanding at a CAGR of 9.72% from 2024 to 2033. The rising start-up culture is boosting the growth of the private equity market.

Key Takeaways

• North America led the private equity market with the largest market share in 2023.
• Asia Pacific is expected to witness the fastest growth in the market during the forecast period.
• By fund type, the buyout segment dominated the market with the highest market share in 2023.
• By sector, the technology segment held the largest market share in 2023.

Market Overview

Private equity is the process of investment partnership that manages and buys organizations before selling them. It manages investment funds on behalf of accredited investors and institutions. Private equity invests in buyouts as a part of consortium, it requires public and private companies it does not invest in the companies that listed in the stock exchange. It merged with hedge funds, or venture capital as an alternative investment. Private equity funds are working with the management of the acquired organizations, and enhanced strategic changes, working efficiency, and growth strategies to enhance performance and generate return on investment. The increasing demand for capital diversification is accelerating the growth of the private equity market.

Top private equity firms in the United States based on the asset under management (AUM) in as of the first quarter end of 2023:

• Blackstone Inc. of New York with the AUM of $1.0 trillion
• Apollo Global Management, Inc. headquarters in New York with the AUM of $510 billion
• The Carlyle Group, headquarters in Washington, D.C. with AUM of $381 billion
• Bain Capital LP, headquarters in Boston Mass $165 billion
• TGP Capital, headquarters in Fort Worth, with AUM of Texas $137 billion
• Thoma Bravo LP, headquarters in Chicago, Ill with AUM of $127 billion
• Silver Lake, headquarters in Menlo Park, California, with AUM of $98 billion
• Vista Equity Partners, headquarters in Austin Texas, with AUM of $96 billion
• Insight Partners, headquarters in New York, with AUM of $90 billion

Private Equity Market Growth Factors

• The economic development in several regions worldwide is transforming private equity and creating the business opportunity that drives the growth of the private equity market.
• The evaluation of private equity beyond the traditional investment that driving the financial expertise and patient capital which boosts the growth of the market.
• Easy availability of large capital in the market that drives the demand for diversification is further contributing to the expansion of the private equity market.
• The rising growth of young age population diverted into the startup, thus the rise in the startup culture is boosting the growth of the market.
• The increasing investment on private equity by various end-use industries like financial services, technology, real estate and services, healthcare, energy and power, industries and others are driving the growth of the private equity market.

Private Equity Market Scope

Private Equity Market Dynamics

Driver:

Benefits associated with the private equity

Private equity firms often employ innovative financial structures, such as leveraged buyouts, which can enhance returns. These structures, while sometimes increasing risk, are appealing to investors looking for sophisticated investment strategies. Private equity provides access to unique investment opportunities not available in the public markets. This includes investments in privately held companies, distressed assets, and buyouts, which can offer attractive risk-reward profiles. Private equity typically involves long-term investments, which align with the goals of long-term investors such as pension funds and endowments. This long-term focus can lead to better strategic decisions and value creation that might be neglected in public companies due to short-term market pressures.

Restraint:

Stringent regulations

More stringent regulations typically require greater transparency and disclosure. While this is beneficial for investors, it can be a burden for private equity firms that prefer to operate with a certain level of confidentiality regarding their strategies and operations. This can deter some firms from entering or remaining in the market. Stringent regulations often come with rigid requirements that can limit the flexibility of private equity firms in structuring deals, managing portfolios, and executing investment strategies. This can make it harder for them to adapt to changing market conditions or pursue innovative investment opportunities.

Opportunity

Shift in trends and advancements

The rising market competition private equity is observed to result in the emergence of technological advancements that can help in generating value, creating robust track record for return generation, and making a strong relationship with the major industry players. Additionally, trends like rising interest in the niche markets, the consumer behavior is shifting towards the niche market is driving the further opportunity in the growth of the market. Private equity is gaining attraction from the niche market segment. Additionally, the wide range of industries such as healthcare, rising investment on the development on medical technology, home services, healthcare technology, specialty physicians practices, e-commerce logistics is accelerating the growth of the private equity market.

Fund Type Insights

The buyout segment dominated the market with the largest market share in 2023. The increased adoption of private equity buyout strategies by advisers seeking the increased return value on their investment from traditional public equity. Buyout funds are the funds who are controlling the majority of the stake or ownership of the company, aiming to enhance the operations of the company. The lifecycle of the buyout funds are of the limited years that may have a 7 to 10 years with the different stages like fundraising, investment, and harvest. There are two types of buyouts transactions are leveraged buyout (LBO), and management buyout (MBO).

The venture capital segment is observed to grow at a notable rate. Venture capital investments, although risky, offer the potential for exceptionally high returns. Successful VC investments in companies like Facebook, Uber, and Airbnb have demonstrated the substantial profits that can be achieved, attracting more investors to the segment. Many governments offer incentives and support for innovation and entrepreneurship, which indirectly boosts the venture capital market. Policies such as tax benefits, grants, and favorable regulations for startups encourage venture capital investment.

Sector Insights

The technology segment projected the largest market share in the private equity market in 2023. The growth of the segment is attributed to the ongoing development in the technology which more attracted the private equity to technology segment. The rising investment in technological evolution like artificial intelligence, IoT, big data, machine learning, and other advancements. The continuous research on the technological evolution for fulfilling the demand for the rising consumer demand for the technologies which gain the attraction of the private equity investments. Further the launch of technologically advanced products in consumer electronic products, industrial technologies are boosting the growth of private equity investment.

Technology companies typically invest heavily in research and development (R&D), leading to continuous innovation. This ongoing innovation cycle can create sustained growth and new investment opportunities, making the technology sector particularly attractive for private equity. The availability and use of big data and advanced analytics in technology companies allow private equity firms to make more informed investment decisions. Data-driven insights can enhance the ability to identify high-potential investments and manage portfolio companies more effectively.

The financial services segment is observed to grow at the fastest rate during the forecast period. Financial services often require significant capital investments, making them attractive targets for private equity firms that can provide substantial funding to support growth, expansion, or restructuring. Financial services, including banking, insurance, asset management, and fintech, have demonstrated strong profitability and growth potential. These sectors often benefit from steady revenue streams, scalability, and the potential for innovation, making them appealing for private equity investments.

North America Private Equity Market Trends

• The investment by the United States accounted for 20.7% of its nominal GDP in March 2023.
• As per the latest reports, the GDP of the United States is increased by 1.8% year in March 2023.
• The Nominal GDP is increased by 6,632.4 USD billion in March 2023.

Asia Pacific is expected to witness the fastest growth in the private equity market during the forecast period. The growth of the market in the region is attributed to the rising population and the increasing consumer base and surge in spending and investment on the business are accelerating the growth of the private equity market. The rising infrastructural investment, supportive demographic trends, government initiative, and technological advancements is boosting the growth of the private equity market in the region.

India’s private equity is significantly increasing and remains strong with the increase of approximately 10% against H2 2022 and reached $16.5 billion with the investment at 80%.

Private Equity Market Companies

• Apollo Global Management, Inc.
• Bain Capital, LP.
• Blackstone Inc.
• EQT AB
• HELLMAN & FRIEDMAN LLC
• Insight Partners
• KOHLBERG KRAVIS ROBERTS & CO. L.P.
• Tarrant Capital IP, LLC
• The Carlyle Group
• Thoma Bravo

Recent Developments

• In May 2024, EQT, a Swedish private equity major is about to invest $5 billion in India even after its part EQT Private Capital Asia is closing the latest mid-market growth fund with the receiving the commitment of investment worth $1.6 billion from investors.
• In June 2024, EQT, a private equity firm Asia business said that “bar is high” for investment in China and there is increased chances for deal opportunities in India, and Japan.
• In May 2024, ChrysCapital, homegrown private equity firm is about to merging the domestic organizations in the formulation business in the range $200-$500 million. The deal size is about to reach $1.5 billion.
• In May 2024, the latest green-power private by EQT, and KKR. Brookfield Asset Management, a Canadian investor said there are talks in buying the French solar and wind specialist Neoen with the deal worth of 6.1 billion euros (6.6 billion).
• In May 2024, Micro VC firm IVY Growth Associates announced launched a SEBI-registered Category I AIF VC fund “Arigato Capital” with the collection target of of ₹250 crore. The sector is planning to invest in the potentially growing industries including generative AI, agritech, fintech, cleantech, consumer brands and SaaS (software-as-a-service) companies.

Segments Covered in the Report

By Fund Type

• Buyout
• Venture Capital
• Real Estate
• Infrastructure
• Others

By Sector

• Technology
• Financial Services
• Real Estate and Services
• Healthcare
• Energy and Power
• Industrial
• Others

By Geography

• North America
• Asia Pacific
• Europe
• Latin America
• Middle East & Africa