Private Equity Market to Grow with a CAGR of 13.45% Globally through 2028

The global private equity market continues to thrive, attracting significant capital for investments in various industries, driven by strong returns and growing interest from investors worldwide.

According to TechSci Research report, “Global Private Equity Market - Industry Size, Share, Trends, Competition Forecast & Opportunities, 2028”, the Global Private Equity Market stood at USD 645.2 billion in 2022 and is anticipated to grow with a CAGR of 13.45% in the forecast period, 2024-2028. The Global Private Equity Market is driven by factors like attractive returns, globalization, technology investments, ESG considerations, and low-interest-rate environments. Tech-centric investments and ESG integration are prominent trends, while co-investment, geographical diversification, healthcare and biotech focus, and resilience planning are shaping strategies. However, challenges include heightened competition, regulatory complexity, exit strategy uncertainties, and ESG integration complexities. To thrive in this dynamic landscape, private equity firms must adapt strategies, focus on sustainability, cultivate specialized expertise, and manage risks effectively. These trends and challenges underscore the industry's ongoing evolution and adaptability to changing market conditions.

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The Global Private Equity Market is propelled by a multitude of dynamic drivers, each contributing to the industry's resilience, growth, and adaptability. At the forefront is the consistent allure of attractive returns. Private equity investments historically yield higher returns than traditional public markets, attracting investors seeking enhanced performance and profitability. The ability of private equity firms to actively engage with portfolio companies, implement strategic changes, and drive operational improvements positions them to generate value and deliver superior returns over the long term. Globalization is another pivotal driver, with private equity transcending geographic boundaries to tap into diverse investment opportunities. Investors, ranging from institutional funds to sovereign wealth funds, seek geographical diversification to mitigate risks and capitalize on growth prospects in various markets. This globalization trend has expanded the reach of private equity, with emerging markets in Asia, Latin America, and Africa becoming increasingly attractive targets for investment. Technology investments stand out as a driving force in the private equity landscape. The rapid evolution of technology has created a fertile ground for private equity firms to invest in companies across the tech spectrum, from startups pioneering disruptive innovations to established tech giants. The COVID-19 pandemic has accelerated digital transformations, making technology-centric investments even more appealing as businesses pivot toward digitization, e-commerce, and other tech-driven solutions.

Environmental, social, and governance (ESG) considerations have ascended to the forefront of private equity strategies, reflecting a broader societal shift towards responsible investing. Private equity firms increasingly integrate ESG criteria into their investment processes, assessing the environmental impact, social responsibility, and corporate governance practices of potential portfolio companies. This shift not only aligns with ethical and sustainable investment principles but also responds to the growing demand from investors for investments that contribute positively to the world. The prevailing low-interest-rate environment globally has become a significant driver for the private equity market. With interest rates at historic lows, the cost of borrowing for leveraged buyouts is relatively inexpensive. This facilitates larger and more leveraged transactions, allowing private equity firms to pursue ambitious investment strategies. However, this abundance of capital also intensifies competition, compelling private equity firms to deploy capital efficiently and differentiate themselves in a crowded marketplace.

Infrastructure investments have gained prominence as a notable driver, reflecting the growing recognition of the critical role infrastructure plays in economic development. Governments and private sector entities worldwide invest in infrastructure projects to enhance transportation, utilities, and digital connectivity. Private equity sees substantial opportunities in these projects, often with stable, long-term cash flows and government-backed revenue streams.

In summary, the Global Private Equity Market is characterized by a convergence of compelling drivers, including attractive returns, globalization, technology-focused opportunities, ESG integration, and the low-interest-rate environment. These drivers collectively shape the industry's trajectory, attracting diverse investors, fostering innovation, and positioning private equity as a dynamic and indispensable force in the global financial landscape. As the market continues to evolve, the industry's ability to navigate challenges and capitalize on emerging opportunities will determine its sustained success.

Technology has rapidly emerged as a pivotal and rapidly growing segment within the global private equity market. Private equity firms are increasingly drawn to technology investments due to their potential for disruptive innovation and high returns. The COVID-19 pandemic accelerated digital transformation, amplifying the appeal of tech-centric investments in areas like artificial intelligence, cybersecurity, and digital health. Private equity's hands-on approach aligns well with the scalability and growth potential of technology companies. This trend reflects technology's central role in modern business and society, making it a focal point for private equity firms and investors seeking innovation and long-term growth.

Major companies operating in Global Private Equity Market are:

• Apollo Global Management, Inc.
• Bain and Co. Inc.
• Bank of America Corp.
• BDO Australia
• Blackstone Inc.
• CVC Capital Partners
• Ernst and Young Global Ltd.
• HSBC Holdings Plc
• The Carlyle Group
• Warburg Pincus LLC

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“The Global Private Equity Market is characterized by key drivers such as attractive returns, globalization, technology-focused investments, ESG integration, and a low-interest-rate environment. These factors attract investors seeking higher returns, geographical diversification, tech-related growth, sustainability, and leverage in a low-yield setting. Major challenges include heightened competition, regulatory complexity, exit strategy uncertainties, and the need to integrate ESG considerations. The industry's response involves adaptability, specialized expertise, and robust risk management strategies. This dynamic landscape is further shaped by notable trends, including tech-centric investments, ESG integration, co-investment approaches, geographical diversification, a focus on healthcare and biotechnology, and increased emphasis on resilience and crisis preparedness.” said Mr. Karan Chechi, Research Director with TechSci Research, a research-based management consulting firm.

“Private Equity Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Fund Type (Buyout, Venture Capital (VCs), Real Estate, Infrastructure, Others), By Sector (Technology, Healthcare, Financial Services, Energy & Power, Others), By Region, By Competition, 2018-2028”, has evaluated the future growth potential of Global Private Equity Market and provides statistics & information on market size, structure and future market growth. The report intends to provide cutting-edge market intelligence and help decision makers take sound investment decisions. Besides, the report also identifies and analyzes the emerging trends along with essential drivers, challenges, and opportunities in Global Private Equity Market.

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