Market Introduction

The global private equity market was valued at USD 530 billion in 2024 and grew at a CAGR of 9.87% from 2025 to 2034. The market is expected to reach USD 1358.52 billion by 2034. The possibility of higher returns will drive the growth of the global private equity market.

Private equity describes investments made for acquiring share or full ownership control of unlisted private businesses. Private equity firms alongside venture capitalists and angel investors combine investment funds from institutional as well as high-net-worth individuals to make these purchases. Private equity investments achieve multiple goals which start with buying substantial ownership stakes in companies and transform them for improved productivity and profitability before selling the acquired stake at a premium value. Private equity firms conduct operations using four main strategies such as leveraged buyouts (LBOs) and venture capital alongside growth capital and distressed investments. Leveraged buyouts represent the main private equity strategy because investment groups unite funding from both equity and debt to purchase companies which they further develop through operational enhancements. Private equity includes venture capital as one of its branches which provides funding for emerging startups with strong potential for growth. The strategy of growth capital involves investing capital in existing companies which plan extended operations or business structure changes whereas distressed investments bring funds to struggling businesses so they can be rehabilitated. Private equity substantially impacts financial operations because it supplies financial resources while offering business guidance combined with operational efficiencies to generate employment and propel economic growth and innovation. The liquidity of PE investments remains low during the entire investment period because investors need to commit funds for a minimum of five to ten years.

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Recent Development

• By loosening rules governing smaller hedge and private equity firms, the UK hopes to increase its attractiveness as a financial hub after Brexit.  Many alternative asset managers may find their workload lessened and be able to focus on expansion and investment if the Treasury raises the regulatory compliance threshold from £100 million to £5 billion in assets under management.  For these new regulations to be shaped to satisfy real-world requirements, industry input is crucial.  This plan is a deliberate attempt to bring the UK into line with changing global financial landscapes, not just a reduction in paperwork.

Market Dynamics

Drivers

Emerging economic markets – Private equity spending has substantially increased because of worldwide economic integration and fast-developing developing marketplaces. Privat equity firms expand their investments beyond traditional North American and European markets to pursue business opportunities across emerging economies in Asia, Latin America and Africa. The regions present an engaging investment environment because their middle-class expansion, increasing consumer market and growing urban populations. Technological adoption together with developing legal frameworks enable business expansion and profitability to thrive. Private equity investors choose emerging markets to invest in sectors with strong performance including infrastructure and healthcare among others income elevation and positive population statistics drive their rapid growth. The capital needs of many family-owned firms and small to medium-sized enterprises in these regions merge perfectly with PE firms' ability to deliver both capital and operational guidance. The established partnerships facilitate achievement of multifaceted benefits because the firms help local businesses expand their scope of operation alongside professional development. Globalization allows PE-backed companies in emerging markets to access international talent together with technology and cross-border capital leading to their global competitiveness.

Restraints

Economic uncertainties – Severe limitations exist for private equity investments which decrease investor interest because they include high-risk profiles and illiquidity along with unpredictable economic conditions. The degree of public stock market tradability does not exist for private equity investment assets. Investments in private equity generally force investors to maintain their funds inside the asset for periods exceeding five to ten years. Private investments may discourage investors who want fast fund access because they lack liquidity. Private equity presents high levels of risk because investors typically support business restructurings of struggling companies or support untested ventures that might lead to negative results. The private equity market suffers direct impacts from economic instability along with unpredictable market conditions. Fundamental changes in worldwide conditions such as political upheaval or rising prices or disease outbreaks cause investors to decrease their investment risk tolerance. Strong economic uncertainties encourage investors to move toward safer investment assets thereby causing capital reduction for private equity funds.

Opportunities

Underperforming public equity – The market demand for private equity steadily increases because of subpar public market performance. Investors turn to alternative options because public markets have demonstrated declining stability and diminished returns and minimal growth throughout recent years. Investors find private equity more attractive than public markets because it combines an active ownership model and long-term value creation strategy which produces stable performance together with higher returns. The total private equity investments among pension funds and sovereign wealth funds and insurance companies keep growing steadily. Their investment in private equity is motivated by their requirements for portfolio diversification as well as higher yields together with the capability to pair long-term liabilities to long-term investments. Private equity now has large investment opportunities because industry-wide digital transformation enables high-growth businesses that use technology.

Segment Analysis

Regional segmentation analysis

The regions analyzed for the market include North America, Europe, South America, Asia Pacific, the Middle East, and Africa. North America emerged as the most significant global private equity market, with a 42% market revenue share in 2024.

The region leads the global private equity market due to its developed financial system, depth of capital markets and robust legal framework while having many institutional investors. Blackstone, KKR and Carlyle lead numerous private equity companies with headquarters in the United States that execute major investment projects throughout various market sectors. Technology sector strength within the U.S. primarily through Silicon Valley and its related innovation centres encourages substantial venture capital and private equity monetary investments. The entrepreneurial business culture and willingness to take risks creates an active commercial atmosphere perfect for private equity operations. Global investors feel secure about investing in North America because its regulatory and legal protocols provide protection as well as transparency.

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• The US private equity behemoth KKR has been selected by Thames Water as its "preferred partner" to purchase the struggling water utility company. Thames hopes the acquisition would be finalised in the second half of this year, and the expected investment by KKR would help it deal with its pile of debt. Following concerns that it would fail or be nationalised, Thames Water, the biggest water business in the UK, began seeking new investors last year. In addition to receiving harsh criticism for sewage spills, the company is having trouble repairing leaks and updating antiquated equipment.

Investment type Segment Analysis

The investment type segment is divided into leveraged buyouts (LBOs), venture capital, growth capital, distressed investments and mezzanine financing. The leveraged buyouts (LBOs) segment dominated the market, with a market share of around 40% in 2024. Leveraged buyouts (LBOs) remain the leading investment approach in the worldwide private equity market since they capture the majority of transaction value and deal numbers. A private equity firm acquires control of a company through borrowed funds by using acquired assets as loan security in LBO transactions. Through this method PE firms can accomplish major acquisitions by investing minimal equity funds which results in amplified financial returns when their investments succeed. These investments rule the market because they create substantial profit by implementing financial transformations and operational effectiveness alongside strategic corporate transformations. LBOs succeed best in companies that generate consistent cash flow from stable businesses with existing market dominance. LBOs used cheap debt during periods of low interest rates which made the strategy even more appealing to financial buyers and resulted in a significant increase in its popularity.

• With support from both new and existing investors in Iceland and the UK, Kvika, the UK branch of Iceland-based Kvika banki, closed the HCPII Fund, exceeding its goal and increasing its ability to invest in both principal and funds to about £100 million. In order to acquire significant minority or majority stakes in well-established, high-potential companies, the fund, which is a collaborative effort between Kvika Bank and its subsidiaries, Kvika UK and Kvika Asset Management, targets companies with an enterprise value of £20-100 million. Each transaction involves the deployment of £5-30 million in equity.

Fund type Segment Analysis

The fund type segment is divided into buyout funds, venture capital funds, growth funds, fund of funds, mezzanine funds and distressed asset funds. The buyout funds segment dominated the market, with a market share of around 37% in 2024. Global private equity demonstrates buyout funds as its prototypical fund structure because they gather most capital pool investment and implement the largest volume of deals along with managing the biggest concentration of assets under management. The fund's control over financial markets arises from their capacity to generate reliable risk-adjusted returns and produce predictable cash flows. Buyout funds find success with institutional investors who prefer stable investments and scalable opportunities because of their mechanisms. Fund managers operating buyout funds have the freedom to select different exit options including IPOs as well as strategic sales and recapitalizations due to adjustable market-specific strategies. The private credit market expansion has contributed to their dominance through financial support for major transactions.

• In the midst of a stagnant market for technology company listings and sales, Industry Ventures announced the creation of a program aimed at assisting venture capital firms in making money off of their investments. After a successful test that focused on 40 managers from its own portfolio, the San Francisco-based company, which gained its reputation by purchasing venture fund investments, is now making the service available to all VC funds.

Industry vertical Segment Analysis

The industry vertical segment is divided into technology, healthcare, financial services, consumer goods & retail, industrial & manufacturing and energy & utilities. The technology segment dominated the market, with a market share of around 35% in 2024. Private equity companies focus more often on tech businesses because these businesses demonstrate growth potential through flexibility combined with steady revenue streams alongside abundant profits and disruptive capacity. The technological sector establishes value faster than conventional sections while needing less funding capital. These firms maintain dependable cash flow streams through subscription-based income and strong customer retention which makes them appealing for leveraged buyout transactions and return generation. The global digitalization movement now occurring across industries has significantly increased market demand for tech solutions thus enhancing the sector's total attraction. The active management approach of private equity firms attracts both established tech companies and mid-sized fast-growth enterprises which need improved professionalization and rapid scaling.

• In keeping with its 36-year history as a leader in private investing, Goldman Sachs Alternatives announced the debut of its G-PE fund, which is a component of its "G-Series" portfolio of open-ended private markets funds.  The fund is the most recent to be introduced under the G-Series name. Access to the main Goldman Sachs private equity franchises is made possible by the timeless private equity technique known as G-PE. Private equity investments from a variety of flagship strategies, such as buyout, growth, secondaries, and co-investment, are accessible through G-PE. The strategies introduced under the G-Series brand are intended to give qualified investors worldwide effective access to a variety of investment strategies covering infrastructure, private equity, real estate credit, and private credit.

Some of the Key Market Players

• Apollo Global Management 
• Bain Capital 
• Blackstone Group 
• CVC Capital Partners 
• EQT Partners 
• Hellman & Friedman 
• KKR & Co. 
• The Carlyle Group 
• Thoma Bravo 
• TPG Capital 
• Vista Equity Partners
• Warburg Pincus 

Report Description

• Market Introduction
• Market Dynamics
• Segment Analysis
• Some of the Key Market Players