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Private Equity

Industry Outlook

The global private equity market is in an “adjustment period…so returns and fundraising are likely to remain under pressure” in the short term, according to Preqin. Deal totals reached 6,549 in 2022, according to the American Investment Council. This was significantly higher than the 2,376 deals that closed in 2010 soon after the recession but much lower than the record 9,140 deals that closed in 2021. Fundraising has also declined in recent years. Private equity funds raised $404.6 billion in the first nine months of 2022—which was only 58.2 percent of the total amount raised in all of 2021. "It’s clear that the golden age of private equity fundraising over the last few years may be coming to an end and the environment is more challenging for general partners (GPs)—especially for new entrants,” according to Preqin. “A greater share of total fundraising is now likely to take the form of re-ups to existing manager relationships, meaning that GPs are having to dislodge incumbents if they are to secure new limited partners.” Despite these trends, private equity funds are expected to increase at a compound annual growth rate of 10.2 percent from 2021 to 2027—reaching $7.6 trillion in value by December 2027, according to Preqin, overtaking hedge funds as the largest alternative asset class.

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