US Private Equity Market Size Likely to Reach at a CAGR of 8.6% By 2033

As per the current market research conducted by the CMI Team, the US Private Equity Market size is expected to record a CAGR of 8.6% from 2024 to 2033. In 2024, the market size is projected to reach a valuation of USD 523,634.6 Million. By 2033, the valuation is anticipated to reach USD 1,100,263.6 Million.

US Private Equity Market: Growth Factors and Dynamics

• Economic Conditions: Economic growth and stability play a significant role in driving the private equity market. During periods of economic expansion, there is typically more investor confidence, increased availability of credit, and higher valuations, which can fuel investment activity in the private equity space.

• Low Interest Rates: Persistently low interest rates, set by central banks to stimulate economic activity, make borrowing cheaper for private equity firms. This environment encourages leveraged buyouts (LBOs) and other forms of acquisition financing, leading to increased deal activity.

• Technological Innovation: Technological advancements continue to disrupt traditional industries and create opportunities for private equity investment in sectors such as technology, healthcare, and fintech. Private equity firms often invest in innovative companies with high growth potential, driving the overall market growth.

• Globalization: The US private equity market is increasingly globalized, with firms seeking investment opportunities not only domestically but also internationally. Cross-border transactions and partnerships enable access to new markets, diverse revenue streams, and potential synergies, contributing to market expansion.

• Regulatory Environment: Regulatory changes and reforms can impact the private equity landscape, influencing fundraising, deal structuring, and exit strategies. While regulations aim to ensure transparency, fairness, and stability in financial markets, they can also create challenges and uncertainties that affect market dynamics.

• Demographic Trends: Changing demographics, such as the aging population and shifting consumer preferences, create investment opportunities in sectors like healthcare, senior living, and consumer goods. Private equity firms capitalize on these trends by investing in companies that address evolving consumer needs and preferences, driving market growth.

• Entrepreneurial Ecosystem: The vibrant entrepreneurial ecosystem in the United States continuously generates new investment opportunities for private equity firms. Startups and emerging companies with innovative business models, products, or services attract private equity investment, driving growth and fostering innovation across various industries.

US Private Equity Market: Partnership and Acquisitions

• In 2023, Bain Capital Private Equity acquired Guidehouse, a prominent global provider of consulting services specializing in the public sector and commercial markets. With expertise in management, technology, and risk consulting, Guidehouse’s acquisition enhances Bain Capital’s portfolio and strengthens its consulting capabilities.

• In 2022, Asset Manager BlackRock acquired US battery energy storage developer Jupiter Power from EnCap Investments, expanding its footprint in the renewable energy sector and strengthening its position in the growing market for energy storage solutions.

Report Scope

US Private Equity Market: COVID-19 Analysis

The COVID-19 pandemic has had a significant impact on the US Private Equity Market, with the industry experiencing both positive and negative effects. Here are some of the key impacts:

• Market Volatility and Uncertainty: COVID-19 induced unprecedented market volatility and uncertainty, causing private equity deal activity to slow down significantly in the initial phases of the pandemic. Uncertain economic conditions led to delays in transactions, revaluations of portfolios, and a cautious approach to new investments.

• Operational Challenges for Portfolio Companies: Many portfolio companies faced operational challenges such as supply chain disruptions, decreased consumer demand, and remote work transitions. These challenges affected revenue streams, profitability, and overall company performance, impacting the value of private equity investments.

• Adaptation to New Norms: Private equity firms adapted quickly to the new operating environment by implementing remote due diligence processes, virtual deal negotiations, and digital communication tools. This agility allowed firms to continue sourcing deals and managing existing investments despite the challenges posed by the pandemic.

• Focus on Portfolio Company Resilience: Private equity firms shifted their focus towards supporting their portfolio companies through the crisis, providing strategic guidance, operational expertise, and financial resources to navigate challenges. This emphasis on strengthening portfolio company resilience helped mitigate the impact of COVID-19 on investment performance.

• Opportunistic Investments: Some private equity firms capitalized on market dislocations and distressed asset opportunities arising from the pandemic. These firms pursued opportunistic investments in sectors such as healthcare, technology, and consumer goods, where demand remained resilient or even increased during the crisis.

• Rapid Economic Recovery: As the economy began to recover from the initial shock of the pandemic, private equity deal activity rebounded, driven by improved market sentiment, fiscal stimulus measures, and vaccine distribution efforts. Increasing investor confidence and a more stable economic outlook facilitated a resurgence in deal-making activity.

• Acceleration of Digital Transformation: COVID-19 accelerated digital transformation trends across industries, creating investment opportunities in technology-driven sectors. Private equity firms capitalized on this trend by investing in companies offering digital solutions, e-commerce platforms, remote collaboration tools, and other technology-enabled services poised for growth in the post-pandemic world.

In conclusion, the COVID-19 pandemic has had a mixed impact on the US Private Equity Market, with some challenges and opportunities arising from the pandemic.

List of the prominent players in the US Private Equity Market:

• The Blackstone Group Inc.
• Kohlberg Kravis Roberts & Co. L.P. (KKR)
• The Carlyle Group Inc.
• Apollo Global Management Inc.
• Bain Capital LP
• TPG Capital
• Warburg Pincus LLC
• CVC Capital Partners
• Advent International Corporation
• Hellman & Friedman LLC
• Vista Equity Partners
• Silver Lake Partners
• General Atlantic LLC
• Thoma Bravo LLC
• Providence Equity Partners LLC
• Others

The US Private Equity Market is segmented as follows:

By Investment Stage

• Early stage (venture capital)
• Growth equity
• Buyout
• Mezzanine
• Others

By Investor Type

• Institutional investors
• High-net-worth individuals (HNWIs)
• Family offices
• Fund of funds

By Industry Focus

• Healthcare
• Technology
• Consumer goods
• Energy and infrastructure
• Financial services
• Others

By Deal Size

• Large-cap
• Mid-cap
• Small-cap