Private Equity Market to 2031 - Trends, Growth, Size, Share
The private equity market size is expected to grow from US$ 460.0 billion in 2023 to US$ 1060.0 billion by 2031; it is anticipated to expand at a CAGR of 11% from 2023 to 2031. The availability of a massive volume of capital in the market influences the private equity market. Private equity firms raise capital from investors and use it to make investments.
Private Equity
Market Analysis
The increasing need for diversification of capital is another factor driving the private equity market. Investors seek to diversify their investment portfolios to mitigate risk and maximize returns. Private equity investments offer an opportunity for investors to diversify their capital allocation by investing in different asset classes, industries, and geographies. The emerging trend of start-up culture has also played a role in driving the private equity market. Start-ups often require significant capital to fund their growth and expansion plans. Private equity firms provide funding to start-ups in exchange for equity ownership, allowing them to participate in the potential upside of these high-growth companies.
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Private Equity Market: Strategic Insights
Market Size Value in US$ 460.0 billion in 2023 Market Size Value by US$ 1060.0 billion by 2031 Growth rate CAGR of 11% from 2023 to 2031 Forecast Period 2023-2031 Base Year 2023
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Private Equity Market: Strategic Insights
| Market Size Value in | US$ 460.0 billion in 2023 |
| Market Size Value by | US$ 1060.0 billion by 2031 |
| Growth rate | CAGR of 11% from 2023 to 2031 |
| Forecast Period | 2023-2031 |
| Base Year | 2023 |
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Private Equity
Industry Overview
- Private equity refers to a form of financing in which investment funds are raised from firms or accredited investors to make direct investments in private companies. Unlike publicly traded companies, these private companies are not listed on a public stock exchange.
- Private equity firms invest in a wide range of companies, including start-ups, struggling companies, and mature businesses, with the goal of realizing appreciation in the value of the acquired assets over a specific time frame, typically 10-12 years.
- Private equity investments offer the potential for higher returns compared to public markets and can provide diversification opportunities for investors. However, it is important to note that private equity investments are typically illiquid and involve a longer-term investment horizon compared to public equity investments.
Private Equity
Market Drivers and Opportunities
Larger Growth Investments to Drive the Private Equity
Market Growth
- In 2021, growth investments reached a total of US$ 19.6 billion, experiencing a decrease of approximately 14% compared to the previous year. However, it is important to note that the growth investments in 2020 were artificially inflated by mega investments worth US$ 15.1 billion in companies of the RIL group. When we adjust for these exceptional deals, the growth investments in 2021 are nearly 2.5 times the value recorded in 2020 (USD 7.8 billion, adjusted value), and more than double the value seen in any of the previous years.
- This significant growth in 2021 can be attributed not only to a higher number of deals but also to an increase in the average deal size. There were 187 deals recorded in 2021, which is 61% higher compared to the previous year's 116 deals. Additionally, the average deal size in 2021 was US$ 105 million, almost 50% higher than in preceding years, except for 2020, which had a higher average deal size due to the mega deals in RIL group companies.
- The growth investments in 2021 were notably strong across several sectors. Eight sectors, including e-commerce, media and entertainment, real estate, and financial services, recorded over US$ 1 billion in growth investments. Thus, all the aforementioned factors are anticipated to drive the private equity market growth.
Private Equity
Market Report Segmentation Analysis
- Based on fund type, the private equity market forecast is segmented into buyouts, venture capital (VCs), real estate, infrastructure, and others.
- The venture capital segment is expected to hold a substantial private equity market share in 2023. Venture capital focuses on providing funding to startups and young businesses that show potential for long-term growth. These companies are often in their early stages and require substantial funds to fuel their growth and development. Venture capitalists are attracted to the potential for above-average returns despite the inherent risks involved.
- Venture capital plays a crucial role in providing funding to companies that may lack access to traditional capital markets, bank loans, or other debt instruments. This is particularly important for new companies or ventures with limited operating history, as venture capital becomes a popular and essential source of raising money.
- Venture capital investments offer the potential for significant returns. While the risk is higher compared to other forms of investments, successful investments in high-growth startups can yield substantial profits, which is anticipated to bring new private equity market trends.
Private Equity
Market Share Analysis By Geography
The scope of the private equity market report is primarily divided into five regions - North America, Europe, Asia Pacific, Middle East & Africa, and South America. North America is experiencing rapid growth and is anticipated to hold a significant private equity market share. The persistently low-interest rates on traditional fixed-income investments have made them less attractive to investors. As a result, investors are seeking higher returns elsewhere, and private equity offers the potential for higher yields. This has led to increased interest and investment in the private equity market in North America.
Private Equity
Market Report Scope
The "Private Equity Market Analysis" was carried out based on fund type, investment, and geography. Based on fund type, the private equity market is segmented into buyouts, venture capital (VCs), real estate, infrastructure, and others. Based on Investments, the market is segmented into large cap, upper middle, lower middle, and real estate. Based on geography, the market is segmented into North America, Europe, Asia Pacific, the Middle East & Africa, and South America.
Private Equity
Market News and Recent Developments
Companies adopt inorganic and organic strategies such as mergers and acquisitions in the private equity market. A few recent key market developments are listed below:
- In September 2022, Nonantum Capital Partners, a middle-market private equity firm, completed the acquisition of LJP Waste Solutions from Aperion Management. LJP Waste Solutions is a leading regional provider of non-hazardous solid waste and recycling services, specializing in zero landfill and waste-to-energy solutions. The company, founded in 1993, offers innovative and sustainable disposal solutions by working directly with customers to evaluate waste and identify recyclable materials or waste streams that can be converted into fuel using waste-to-energy methods.
[Source: Nonantum Capital Partners, Company Website]
- In August 2022, Trilegal, a leading law firm in India, acted as the sole advisor to Prosus Ventures and PayU India in their acquisition of IndiaIdeas.com Limited (BillDesk). This acquisition marks the largest-ever deal in the digital payments space in India, with a value of US$ 4.7 billion. Trilegal played a crucial role in securing unconditional approval from the Competition Commission of India (CCI) for the transaction successfully navigating the regulatory process.
[Source: Trilegal, Company Website]
Private Equity
Market Report Coverage & Deliverables
The market report on “Private Equity Market Size and Forecast (2021–2031)”, provides a detailed analysis of the market covering below areas-
- Market size & forecast at global, regional, and country- level for all the key market segments covered under the scope.
- Market dynamics such as drivers, restraints, and key opportunities.
- Key future trends.
- Detailed PEST & SWOT analysis
- Global and regional market analysis covering key market trends, key players, regulations, and recent market developments.
- Industry landscape and competition analysis covering market concentration, heat map analysis, key players, recent developments.
- Detailed company profiles.
Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
Fund Type, Investments, and Geography
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
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to country scope.
Frequently Asked Questions
The increasing need for diversification of capital. Investors seeking to diversify their investment portfolios to mitigate risk and maximize returns are the major factors that propel the global private equity market.
The private equity market size is expected to grow from US$ 460.0 billion in 2023 to US$ 1060.0 billion by 2031; it is anticipated to expand at a CAGR of 11% from 2023 to 2031.
Crowdfunding and new investment platforms are impacting private equity, which is anticipated to play a significant role in the global private equity market in the coming years.
The key players holding majority shares in the global private equity market are Blackstone Inc, HSBC Holdings Plc, Morgan Stanley, CVC Capital Partners, and The Carlyle Group.
The global private equity market is expected to reach US$ 1060.0 billion by 2031.
- AHAM Asset Management Berhad
- Allens
- Apollo Global Management, Inc.
- Bank of America Corp.
- BDO Australia
- Blackstone Inc.
- CVC Capital Partners
- HSBC Holdings Plc
- Morgan Stanley
- The Carlyle Group
- Warburg PincusLLC
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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