United States Private Equity Market By Investment Type (Large Cap, Mid Cap, Small Cap), By Application (Early Stage Venture Capitals, Private Equity, Leveraged Buyouts), By Region, Competition, Forecast & Opportunities, 2020-2030F

Market Overview

United States Private Equity Market was valued at USD 475.08 Billion in 2024 and is expected to reach USD 860.39 Billion by 2030 with a CAGR of 10.46% during the forecast period. The United States Private Equity Market is one of the fastest-growing sectors, as businesses increasingly favor venture capital and buy-out funding options for their investments and organizational financing. There has been a rise in the establishment of new funds by seasoned private equity professionals from well-established firms, leading to a significant increase in available deployable capital. 

Key Market Drivers

Increased Institutional Investment

One of the primary drivers of the United States Private Equity Market is the growing allocation of capital from institutional investors. Pension funds, sovereign wealth funds, insurance companies, and endowments have been increasingly seeking private equity investments as part of their diversified portfolios. These institutional investors are attracted to private equity due to its potential for higher returns compared to traditional asset classes like public equities and bonds. The long-term investment horizon of private equity also aligns with the goals of these institutions, which typically focus on steady, risk-adjusted returns over extended periods. In recent years, institutional investors have been raising their allocations to private equity to take advantage of favorable market conditions, the ability to access higher-growth opportunities, and the relatively higher returns compared to more traditional investment vehicles. As institutions seek to hedge against market volatility and inflation, private equity provides an attractive alternative investment option. The increased capital from institutional investors has helped drive the growth of the U.S. private equity market, making it a central component of the broader financial landscape.

Rising Demand for Alternative Investments

Another significant driver of the U.S. Private Equity Market is the growing demand for alternative investments. As investors seek to diversify their portfolios and reduce exposure to public market volatility, private equity has become a key component of alternative investment strategies. Alternatives such as private equity, venture capital, real estate, and hedge funds offer a way to access higher returns while mitigating the risks associated with traditional asset classes. Over the past decade, private equity has gained traction as investors look for opportunities that provide better risk-adjusted returns in comparison to the low-interest-rate environment that has persisted globally. In particular, the ability to target specific sectors, including technology, healthcare, and energy, has enhanced private equity's appeal. Additionally, many investors are attracted to the relative illiquidity of private equity, as it enables a focus on long-term value creation rather than short-term market fluctuations. This rising interest in alternatives is reflected in the increase in assets under management in private equity funds, contributing to the expansion of the U.S. private equity market.

Technological Advancements and Innovation

Technological advancements and innovation have become a key catalyst for the expansion of the U.S. Private Equity Market. Over the past decade, private equity firms have increasingly turned their attention to technology-driven companies and industries that are experiencing rapid growth. Startups and scale-ups in the technology, fintech, biotech, and renewable energy sectors have attracted significant private equity investment due to their potential for high returns and market disruption. The proliferation of digital platforms, AI, and machine learning in various industries has created opportunities for private equity firms to invest in innovative companies that can scale quickly. Technology has also enabled more efficient deal sourcing, due diligence, and portfolio management, improving operational efficiencies for private equity firms. The ability to identify high-growth sectors and make data-driven investment decisions has led to an influx of capital into technology-focused private equity funds. Additionally, advancements in digital tools and platforms have made private equity investments more accessible to a broader range of investors, further driving market expansion. As innovation continues to reshape industries, private equity is increasingly seen as a critical mechanism for driving growth and capturing value in the modern economy.

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Key Market Challenges

Regulatory and Compliance Challenges

One of the key challenges facing the United States Private Equity Market is navigating the complex regulatory environment. Private equity firms must comply with an array of regulations imposed by various bodies, including the Securities and Exchange Commission (SEC), the Department of Labor, and the Internal Revenue Service. These regulations cover areas such as disclosure requirements, investor protections, and fiduciary duties, and failure to comply can result in severe penalties. Moreover, the regulatory landscape is continually evolving, especially with increasing focus on environmental, social, and governance (ESG) standards. Private equity firms must ensure they stay updated with changing laws and regulations to mitigate compliance risks. This regulatory complexity often requires significant resources dedicated to legal and compliance functions, which can increase costs and operational burdens, making it a persistent challenge in the private equity market.

Rising Competition

Another challenge in the U.S. Private Equity Market is the rising level of competition. As the market for private equity investments has expanded, more firms, both domestic and international, are entering the space, increasing the competition for high-quality deals. This intensified competition often drives up asset prices, particularly in popular sectors like technology, healthcare, and energy. As a result, private equity firms must be increasingly strategic in their deal sourcing and may need to pay premium prices to secure attractive assets. Moreover, the growing number of private equity firms, along with the rise of other institutional investors, has created a more crowded market, making it harder to generate strong returns. Firms that cannot differentiate themselves or gain access to lucrative investment opportunities may face challenges in maintaining profitability and sustaining investor interest.

Key Market Trends

Increased Focus on Technology and Innovation

A prominent trend in the United States Private Equity Market is the growing focus on technology and innovation-driven sectors. As industries become increasingly digital and technology evolves rapidly, private equity firms are placing more emphasis on tech-driven investments. This includes sectors like fintech, artificial intelligence (AI), cybersecurity, and biotech, where rapid growth and disruptive potential offer substantial returns. Private equity firms are particularly drawn to startups and scale-ups with innovative business models that leverage technology to disrupt traditional industries. Additionally, the COVID-19 pandemic accelerated digital transformation, prompting private equity firms to seek opportunities in companies that are leading technological advancements. This trend has led to higher capital inflows into technology-focused private equity funds, with firms increasingly targeting tech-based portfolio companies to capitalize on their growth and scalability potential.

Environmental, Social, and Governance (ESG) Integration

ESG (Environmental, Social, and Governance) considerations are increasingly being integrated into private equity investment strategies. As investors and stakeholders place more emphasis on sustainable and responsible investing, private equity firms are incorporating ESG factors into their due diligence and portfolio management processes. Firms are now more focused on funding companies that align with ESG principles, which includes prioritizing companies with strong environmental practices, ethical governance, and social responsibility. This trend is driven by growing consumer demand for sustainable business practices, increasing regulatory pressure, and the desire for long-term value creation. Investors believe that ESG-driven businesses can achieve better risk-adjusted returns, and private equity firms are aligning their portfolios accordingly. This shift is also creating new opportunities, as ESG-compliant companies often have competitive advantages, including improved operational efficiency and stronger reputations.

Private Equity Firms Targeting Middle-Market Companies

A significant trend in the U.S. Private Equity Market is the growing interest in middle-market companies. These companies, typically with annual revenues between $10 million and $1 billion, offer attractive growth potential and are increasingly becoming the target of private equity investments. Middle-market firms often operate in niche markets or specialized industries and present private equity firms with opportunities for value creation through operational improvements, market expansion, and strategic acquisitions. Many private equity firms are seeking to tap into the untapped potential of these companies, which may not have the scale or resources to compete with larger firms. The trend is driven by the availability of debt financing, which makes acquiring and growing middle-market companies more feasible, as well as the ability to generate higher returns due to these companies' growth potential and lower valuations compared to large-cap firms. This shift has led to more private equity firms targeting middle-market sectors for their investments.

Segmental Insights

Investment Type Insights

In the United States Private Equity Market, Large Cap investments is the dominating segment. Large-cap companies, typically defined as those with a market capitalization of over USD10 billion, have historically been the primary focus for private equity firms due to their established business models, consistent cash flows, and lower risk profiles. These companies often offer substantial opportunities for operational improvements, strategic acquisitions, and value creation through management expertise. Additionally, large-cap companies tend to have more robust access to capital, which enhances their attractiveness for private equity investments. The large-cap sector also benefits from its capacity to scale, which makes it easier for private equity firms to implement significant changes, enhance profitability, and generate returns. While mid-cap and small-cap companies present higher growth potential, they come with added risks, which can deter some investors, particularly those looking for stable and less volatile returns. Despite growing interest in mid and small-cap markets, large-cap investments remain the dominant segment due to their ability to deliver consistent and large-scale returns for private equity firms.

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Regional Insights

The Northeast region dominated the United States Private Equity Market, primarily due to its concentration of major financial hubs, such as New York City, Boston, and Philadelphia. New York, in particular, serves as the heart of the U.S. financial industry, housing numerous private equity firms, venture capitalists, and institutional investors. This region is home to a robust network of large institutional investors, including pension funds, endowments, and family offices, all of which contribute significantly to the growth of private equity. Additionally, the Northeast boasts a highly developed infrastructure, sophisticated legal and financial services, and access to a diverse range of industries, including technology, healthcare, and finance, all of which attract private equity investments. The region’s proximity to both national and global markets allows firms to engage in strategic deals, making it a magnet for private equity activity. Furthermore, the strong presence of universities and research institutions fosters innovation and the creation of high-growth startups, further boosting private equity investments. Thus, the Northeast continues to lead in the U.S. private equity market.

Recent Developments

• In 2023, Everton has been acquired by 777 Partners, with the Miami-based private equity firm taking over from Farhad Moshiri in a deal valued at over USD 685 million. The investment fund reached an agreement with British-Iranian billionaire Moshiri to purchase his 94.1 percent stake in the club.
• In 2023, Cvent Holding Corp., a leading provider of technology for meetings, events, and hospitality, has reached a definitive agreement to be acquired by an affiliate of private equity funds managed by Blackstone. The transaction is valued at an enterprise value of approximately USD 4.6 billion.
• In 2024, J.P. Morgan unveiled its Private Markets Data Solutions for institutional investors, accessible through Fusion by J.P. Morgan. This all-encompassing data management solution for private assets allows investors, including General Partners and Limited Partners, to analyze and gain transparency into their entire portfolio, spanning both public and private holdings. It also eliminates the manual processes involved in managing this operational workflow at scale.
• In 2024, Pantheon announced the launch of two new funds to enhance its private wealth offerings across key growth markets worldwide. Drawing on decades of expertise in structuring evergreen products, Pantheon aims to address the complex needs of private wealth investors seeking diversified portfolios and access to exclusive market segments. The new funds, focused on secondaries investments in private credit and private equity, leverage Pantheon’s leadership and extensive experience in mid-market secondaries investing.

Key Market Players

• Blackstone Group
• Carlyle Group
• Warburg pincus LLC
• Neuberger Berman group LLC
• Chicago Capital Holdings
• CVC Capital Partners
• Kohlberg Kravis Roberts & Co
• Bain Capital LP
• Thoma Bravo LP
• Gottenberg associates LLC
  

Report Scope:

In this report, the United States Private Equity Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• United States Private Equity Market, By Investment Type:

o   Large Cap

o   Mid Cap

o   Small Cap

• United States Private Equity Market, By Application:

o   Early Stage Venture Capitals

o   Private Equity

o   Leveraged Buyouts

• United States Private Equity Market, By Region:

o   South

o   West

o   Midwest

o   Northeast

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the United States Private Equity Market.

Available Customizations:

United States Private Equity Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).