Global private equity total assets under management are expected to grow at an annualized rate of around 10% from 2022, reaching $8.5 trillion by 2028, despite slow fundraising and valuation uncertainty, a Preqin private equity report shows.
This growth would be driven largely by North American private equity firms, with growth forecast at a compound annual growth rate of 11.3% through 2028 when Preqin projects private equity AUM would reach $5.8 trillion. However, this would be a slowdown from the 18.3% compound annual growth rate of North American private equity from 2016 to 2022.
Global private equity posted -4.5% net internal rate of return for the 12 months ended March 31, a dramatic fall from 29.3% net IRR in the year-earlier period.
Meanwhile, exit value dropped in the first nine months of 2023. The transaction value of global private equity exits in the first three quarters of 2023 was a combined $232.4 billion, 55% of the value of private equity exits in all of 2022.
Fundraising is also continuing to trend downward, with global private equity firms raising a total of $508.6 billion in the nine months ended Sept. 30, which is 46% of the capital raised in all of 2022.
Preqin expects fundraising for private equity in the Asia-Pacific region to have an annualized growth rate of -6.5% through 2028 in part due to investor caution with China, with more weakness in fundraising next year, before a gradual recover later in the forecast period. Preqin expects investors increasing interest in India and Southeast Asia to boost fundraising for Asia-Pacific-focused private equity.
