Despite global economic challenges, the buyout industry not only weathered the storm but thrived, deploying a record $1.2 trillion in 2023 while amassing an unprecedented $2.1 trillion in dry powder, signaling a robust and adaptable market poised for continued expansion.
Key Takeaways
- In 2023, global private equity buyout deal value reached $1.2 trillion, marking a 15% increase from 2022 despite economic headwinds
- The buyout market's dry powder stood at $2.1 trillion as of mid-2023, representing 20% more than pre-pandemic levels
- North American buyout market grew by 12% YoY in AUM to $4.5 trillion in 2023
- Global buyout deal value in 2023 was $1.15 trillion across 12,500 deals
- North America dominated with 45% of global buyout deal value at $517 billion in 2023
- Europe buyout deals totaled €450 billion in value with 4,200 transactions in 2023
- Global PE buyout fundraising reached $769 billion in 2023 across 1,450 funds
- North America captured 60% of buyout fundraising at $461 billion in 2023
- Europe buyout funds raised €210 billion from 420 vehicles in 2023
- Global buyout net IRR averaged 15.2% for 2018-2023 vintages
- Buyout DPI reached 1.25x for funds closed 2019-2023
- Top quartile buyout funds delivered 22% net IRR through 2023
- Global buyout exits totaled $850 billion in value across 7,500 deals in 2023
- IPO exits for buyouts generated $250 billion in 2023, 29% of total value
- Trade sales dominated buyout exits at 55% volume, $420 billion value in 2023
The buyout industry grew robustly in 2023 despite economic challenges and high inflation.
Deal Volume & Value
- Global buyout deal value in 2023 was $1.15 trillion across 12,500 deals
- North America dominated with 45% of global buyout deal value at $517 billion in 2023
- Europe buyout deals totaled €450 billion in value with 4,200 transactions in 2023
- Asia-Pacific buyout deal value hit $220 billion across 2,800 deals in 2023
- Average buyout deal size globally was $92 million in 2023, up 5% YoY
- US mega-deals (> $5bn) numbered 28 in 2023, totaling $350 billion
- Tech sector buyouts: 1,200 deals worth $280 billion in 2023
- Healthcare buyout deals: 950 transactions at $210 billion value in 2023
- Industrial buyouts saw 1,500 deals totaling $190 billion in 2023
- Financial services buyouts: 650 deals worth $140 billion in 2023
- Q4 2023 buyout deal count rose 18% QoQ to 3,200 globally
- Sponsor-to-sponsor deals accounted for 35% of buyout volume in 2023
- Add-on deals represented 55% of total buyout transactions in 2023
- Leveraged buyouts using >6x EBITDA averaged 2,100 deals in 2023
- Cross-border buyouts numbered 1,800 at $320 billion value in 2023
- UK buyout deals: 850 transactions worth £75 billion in 2023
- German buyout deal value €85 billion across 550 deals in 2023
- French buyouts: 420 deals totaling €65 billion in 2023
- Indian buyout deals hit 180 at $25 billion value in FY2023
- Australian buyouts: 220 deals worth AUD 18 billion in 2023
- Brazilian buyout deal value $30 billion across 120 deals in 2023
- Chinese buyout deals declined to 450 at $40 billion in 2023
- Japanese buyouts: 300 deals totaling ¥4.5 trillion in 2023
- Divestiture-driven buyouts: 900 deals in 2023
- Public-to-private buyouts numbered 75 globally at $120 billion in 2023
- Real estate adjacent buyouts: 400 deals worth $85 billion in 2023
- Average holding period for buyouts shortened to 4.8 years in 2023 deals
Deal Volume & Value Interpretation
Despite a staggering trillion-dollar frenzy of leveraged bets and sector-specific shopping sprees, the buyout game in 2023 revealed a stark, almost musical-chair simplicity: North America wrote the loudest checks, everyone else hummed along, and the real strategy was just buying from each other and adding on until the music—or the holding period—inevitably stopped.
Exits & Trends
- Global buyout exits totaled $850 billion in value across 7,500 deals in 2023
- IPO exits for buyouts generated $250 billion in 2023, 29% of total value
- Trade sales dominated buyout exits at 55% volume, $420 billion value in 2023
- Secondary buyouts accounted for 25% of exit value at $190 billion in 2023
- Average buyout exit multiple was 11.2x EBITDA in 2023
- North America buyout exits $450 billion across 3,800 transactions 2023
- Europe exits €280 billion from 2,500 deals in 2023
- Asia buyout exits $110 billion in 2023, up 15% YoY
- Tech buyout exits: $180 billion value in 2023
- Healthcare exits generated $140 billion for buyout owners 2023
- Hold periods at exit averaged 4.9 years for 2023 buyout realizations
- Sponsor-to-sponsor exits rose to 1,900 deals in 2023
- Public market conditions delayed 20% of planned buyout IPOs in 2023
- Continuation vehicles used in 15% of buyout exits 2023
- UK buyout exits £55 billion across 650 deals 2023
- German exits €60 billion in 2023
- French buyout exits €45 billion 2023
- Indian buyout exits $18 billion in FY2023
- Rise of GP-led secondaries trended up 40% in buyout exits 2023
- ESG factors influenced 60% of buyout exit decisions in 2023
- Dual-track exits (IPO + trade) used in 10% of large buyouts 2023
- Exit multiples compressed 0.8x YoY to 11.2x in H2 2023
- Carve-outs as exit strategy grew 25% in buyout volume 2023
- AI integration trending in 35% of new buyout deals 2023
- Sustainability focus in 70% of buyout investment theses 2023
- Dry powder deployment rate fell to 8% quarterly in 2023
- Club deals increased to 20% of mega-buyouts in 2023
- Debt financing costs rose 200bps impacting 40% buyout structures 2023
Exits & Trends Interpretation
While trade sales quietly dominated with the reassuring heft of a 55% market share, the buyout industry in 2023 navigated a high-stakes maze of rising debt costs and compressed multiples by expertly playing a game of pass-the-parcel, cleverly leveraging secondary buyouts, continuation funds, and a 40% surge in GP-led deals to keep the $850 billion exit engine humming.
Fundraising
- Global PE buyout fundraising reached $769 billion in 2023 across 1,450 funds
- North America captured 60% of buyout fundraising at $461 billion in 2023
- Europe buyout funds raised €210 billion from 420 vehicles in 2023
- Asia-Pacific buyout fundraising totaled $85 billion across 280 funds in 2023
- Average buyout fund size grew to $650 million in 2023 final closes
- Mega-funds (> $5bn) raised $320 billion from 45 funds in 2023
- First-time buyout funds collected $28 billion from 150 vehicles in 2023
- LP commitments to buyouts hit $900 billion in pledges during 2023
- Pension funds allocated 12% of portfolios to buyouts, contributing $250 billion in 2023
- Sovereign wealth funds invested $120 billion into buyout funds in 2023
- Insurance companies boosted buyout allocations to $80 billion in 2023
- Family offices committed $45 billion to buyouts in 2023, up 25% YoY
- US public pensions raised $110 billion for buyouts in 2023
- European pensions funded €55 billion in buyout commitments 2023
- Middle East SWFs led with $65 billion in buyout fundraises 2023
- Fundraising time for buyout funds averaged 22 months in 2023
- 75% of 2023 buyout fundraises were oversubscribed
- Core-plus buyout strategies raised $50 billion in 2023
- Secondaries buyout funds collected $75 billion in 2023
- Co-investment buyout vehicles raised $40 billion alongside main funds 2023
- India-focused buyout funds raised $12 billion in 2023
- China buyout fundraising dropped to $15 billion across 90 funds 2023
- UK buyout funds closed €25 billion in 2023
- German buyout fundraising €18 billion from 35 funds 2023
- French buyout funds raised €22 billion in 2023
- Australian buyout fundraising AUD 8 billion in 2023
- Brazilian buyout funds raised $6 billion in 2023
- Japanese buyout funds closed ¥1.2 trillion in 2023
Fundraising Interpretation
The private equity machine, with its North American engine roaring and pension fund fuel pumping, vacuumed up nearly a trillion dollars in global commitments last year, proving that even in uncertain times, there's nothing quite like the allure of buying a company, fixing it up, and selling it for a pretty profit.
Market Size & Growth
- In 2023, global private equity buyout deal value reached $1.2 trillion, marking a 15% increase from 2022 despite economic headwinds
- The buyout market's dry powder stood at $2.1 trillion as of mid-2023, representing 20% more than pre-pandemic levels
- North American buyout market grew by 12% YoY in AUM to $4.5 trillion in 2023
- European buyout AUM expanded to €2.8 trillion by end-2023, up 8% from prior year amid stabilizing rates
- Asia-Pacific buyout market saw 18% AUM growth to $1.1 trillion in 2023, driven by tech sector investments
- Buyout industry projected CAGR of 9.5% from 2024-2028, reaching $6.5 trillion in AUM globally
- US buyout firms controlled 55% of global AUM at $3.2 trillion in 2023
- Buyout dry powder in Europe hit €700 billion in 2023, a record high
- Global buyout market resilience shown with 5% AUM growth in H1 2023 despite inflation
- Latin America buyout AUM grew 22% to $250 billion in 2023, fueled by infrastructure deals
- Middle East buyout market AUM doubled to $180 billion since 2020 by 2023
- Buyout sector's global AUM hit $5.8 trillion in 2023, per Preqin data
- Tech-focused buyouts contributed 25% to market growth in 2023
- Healthcare buyout subsector AUM rose 14% to $900 billion globally in 2023
- Consumer buyouts saw 10% AUM increase to $750 billion in 2023 amid e-commerce boom
- Energy transition buyouts grew AUM by 30% to $400 billion in 2023
- Buyout market in India expanded AUM 25% to $150 billion in FY2023
- Australian buyout AUM reached AUD 120 billion in 2023, up 11%
- Canadian buyout market AUM hit CAD 300 billion, growing 9% in 2023
- UK buyout AUM stood at £650 billion in 2023, stable despite Brexit effects
- German buyout market AUM grew to €450 billion in 2023, +7% YoY
- French buyout AUM reached €350 billion in 2023, up 12%
- Buyout industry global headcount exceeded 500,000 professionals in 2023
- Number of active buyout firms worldwide hit 8,500 in 2023
- Mega-buyout deals (>€5bn) represented 15% of total market value in 2023
- Mid-market buyouts (sub-$1bn) accounted for 60% of deal count but 30% value in 2023
- Small buyouts (<$100m) grew 20% in volume in 2023
- Buyout AUM per firm averaged $680 million globally in 2023
- Top 10 buyout firms held 25% of global AUM at $1.45 trillion in 2023
- Buyout market penetration in GDP terms reached 8% in US, 5% in Europe by 2023
Market Size & Growth Interpretation
The global private equity buyout industry has clearly decided that economic headwinds are for mere mortals, as it amassed a staggering $2.1 trillion in dry powder and pushed its total assets under management to nearly $6 trillion in 2023, proving that for those with enough capital, turbulence is just another opportunity to shop.
Returns & Performance
- Global buyout net IRR averaged 15.2% for 2018-2023 vintages
- Buyout DPI reached 1.25x for funds closed 2019-2023
- Top quartile buyout funds delivered 22% net IRR through 2023
- Median buyout MOIC was 1.8x for mature funds in 2023
- North America buyout pools averaged 16.5% IRR 2015-2020 vintages to 2023
- Europe buyout IRRs averaged 13.8% for 2018 vintage to end-2023
- Asia buyout returns hit 18% IRR for top performers in 2023
- Mega-buyout IRRs underperformed at 12.5% vs 16% mid-market in 2023 data
- Tech buyout subsector IRR 20.1% through 2023
- Healthcare buyouts averaged 17.2% net IRR to 2023
- Industrial buyout MOIC 2.1x median in 2023 realizations
- Buyout value creation from ops improvements: 45% of total returns in 2023
- Multiple expansion contributed 35% to buyout IRRs in 2023
- Leverage effect added 20% to returns for 2023 vintage analysis
- Public market benchmark underperformed buyouts by 4.5% annually to 2023
- Vintage year 2020 buyouts on track for 25% IRR as of 2023
- Secondaries buyout returns averaged 18.5% IRR in 2023
- Distressed buyouts delivered 22% IRR post-COVID to 2023
- UK buyout IRR 14.2% median through 2023
- German buyout returns 13.5% average to 2023
- French buyout MOIC 1.9x median in 2023
- Indian buyout IRR 21% for 2018-2023 vintages
- Australian buyout returns 15.8% IRR to 2023
- Brazilian buyout MOIC 2.3x top quartile 2023
- Volatility in buyout returns dropped to 8% std dev in 2023
- ESG-integrated buyouts outperformed by 2.5% IRR in 2023 data
- GP-led secondaries yielded 19% IRR in 2023 realizations
Returns & Performance Interpretation
While the industry loves to tout its 15.2% average, the real story is that top-quartile managers are quietly pocketing 22% by surgically improving operations for nearly half their returns, proving that in a world of financial engineering, actually fixing companies is still the most lucrative magic trick.
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