In a year that saw fundraising climb to a staggering $1.21 trillion while dealmaking cooled, the global private equity industry demonstrated its formidable scale and its strategic patience, reshaping the financial landscape with unprecedented pools of capital awaiting deployment.
Key Takeaways
- Global private equity fundraising reached a record $1.21 trillion in 2022 across 3,365 funds.
- Buyout funds accounted for 64% of total private equity fundraising in 2022, raising $772 billion.
- North America dominated PE fundraising with $510 billion raised in 2022, representing 42% of global totals.
- Global PE dry powder stood at $2.56 trillion at end-2022.
- PE investment value reached $892 billion in 2022 across 14,198 deals.
- Buyout investments dominated with $617 billion deployed in 2022, 69% of total.
- Global PE exits value was $612 billion in 2022 across 2,450 deals.
- Trade sales accounted for 52% of PE exits in 2022, valued at $318 billion.
- North America exit value reached $290 billion in 2022, 47% of global.
- Global PE gross IRR averaged 15.2% for vintages 2018-2022.
- Top-quartile PE funds delivered 22.1% net IRR through 2022.
- Median DPI for mature PE funds was 1.75x as of end-2022.
- Global PE AUM grew to $4.5 trillion by end-2022.
- Dry powder as % of AUM reached 57% globally in 2022.
- Number of active PE firms worldwide was 12,500 at end-2022.
Private equity fundraising hit a record high in 2022 despite slower dealmaking and exits.
AUM and Market Trends
- Global PE AUM grew to $4.5 trillion by end-2022.
- Dry powder as % of AUM reached 57% globally in 2022.
- Number of active PE firms worldwide was 12,500 at end-2022.
- Buyout AUM represented 60% of total PE AUM at $2.7 trillion in 2022.
- North America held 58% of global PE AUM, $2.61 trillion in 2022.
- Europe PE AUM stood at $1.35 trillion by end-2022.
- Asia-Pacific PE AUM grew 12% to $650 billion in 2022.
- LP commitments to PE reached $1.4 trillion over last 5 years to 2022.
- Concentration: top 20 GPs managed 45% of global PE AUM in 2022.
- VC AUM within PE was $1.2 trillion at end-2022.
- Infrastructure PE AUM hit $1.1 trillion globally in 2022.
- Average PE firm AUM was $360 million in 2022.
- Dry powder growth rate was 10% YoY to $2.56 trillion in 2022.
- US PE AUM dominated at 55% share, $2.48 trillion.
- Secondaries AUM reached $450 billion by end-2022.
- Emerging markets PE AUM was 15% of global at $675 billion in 2022.
- GP stakes market AUM grew to $35 billion in 2022.
- Continuation funds AUM surged to $80 billion by 2022.
- Technology allocation in PE portfolios averaged 25% in 2022.
- Healthcare PE AUM was $850 billion at end-2022.
- Fundraising-to-AUM ratio was 27% for PE in 2022.
- Number of PE funds in fundraising pipeline: 18,000 in 2022.
- Sovereign wealth funds held 15% of global PE AUM in 2022.
AUM and Market Trends Interpretation
The private equity world is now a $4.5 trillion behemoth, staggering under the weight of its own $2.56 trillion in unspent cash while an army of 12,500 firms fights over a pie that is shockingly concentrated in the hands of a few, proving that even in a world awash with capital, the real power is still held by a remarkably small club.
Exits
- Global PE exits value was $612 billion in 2022 across 2,450 deals.
- Trade sales accounted for 52% of PE exits in 2022, valued at $318 billion.
- North America exit value reached $290 billion in 2022, 47% of global.
- Europe PE exits totaled $190 billion in 2022, down 35% YoY.
- IPO exits for PE generated $85 billion in 2022, only 14% of total value.
- Secondary buyouts comprised 38% of exit value at $233 billion in 2022.
- Asia-Pacific exits reached $85 billion in 2022, led by India at $20 billion.
- Average exit multiple for PE deals was 2.6x invested capital in 2022.
- US exits numbered 1,100 deals worth $290 billion in 2022.
- UK PE exit value was $40 billion in 2022, trade sales dominant.
- Healthcare exits generated $75 billion in 2022 for PE firms.
- Technology sector exits totaled $110 billion in 2022 globally.
- Sponsor-to-sponsor deals hit 950 in 2022, $233 billion value.
- China PE exits dropped to $15 billion in 2022 due to market conditions.
- Consumer exits for PE were $65 billion in 2022.
- Infrastructure exits reached $45 billion in 2022 across 180 deals.
- Median holding period for exited PE deals was 4.8 years in 2022.
- Financial services exits valued $50 billion in 2022 for PE.
- Latin America PE exits totaled $8 billion in 2022.
- Industrial sector exits generated $70 billion in 2022.
- Number of PE exits globally fell to 2,450 in 2022 from 3,200 in 2021.
- Middle East exits for PE were $12 billion in 2022.
- Business services exits hit $55 billion in 2022.
- India PE exits reached $22 billion in 2022, up 20% YoY.
- Energy exits for PE totaled $30 billion in 2022.
Exits Interpretation
The private equity world proved in 2022 that it's still a masterclass in turning investments into cash, just with fewer graduates, a distinct North American valedictorian, and a curriculum favoring trade sales and passing the asset to the classmate next to you over the grand ceremony of an IPO.
Fundraising
- Global private equity fundraising reached a record $1.21 trillion in 2022 across 3,365 funds.
- Buyout funds accounted for 64% of total private equity fundraising in 2022, raising $772 billion.
- North America dominated PE fundraising with $510 billion raised in 2022, representing 42% of global totals.
- Europe saw PE fundraising of $294 billion in 2022, down 22% from the previous year.
- Asia-Pacific fundraising for PE hit $156 billion in 2022, with growth funds leading at 35% share.
- Mega-funds over $5 billion raised $510 billion in 2022, comprising 42% of all PE capital.
- Average time to final close for PE funds lengthened to 25 months in 2022 from 20 months in 2021.
- First-time PE funds raised $32 billion in 2022, representing 2.6% of total fundraising.
- Sovereign wealth funds committed $85 billion to PE in 2022, up 15% year-over-year.
- Pension funds allocated $120 billion to PE fundraising globally in 2022.
- US-based GPs raised 55% of global PE capital in 2022, totaling $666 billion.
- Secondaries fundraising surged to $75 billion in 2022, a 45% increase from 2021.
- Venture capital subset of PE raised $285 billion in 2022, down 35% from 2021 peak.
- Infrastructure PE funds raised $112 billion in 2022, up 20% from prior year.
- Number of PE funds closed in 2022 was 3,365, compared to 3,800 in 2021.
- Average PE fund size grew to $360 million in 2022 from $310 million in 2021.
- China PE fundraising dropped to $45 billion in 2022, down 40% amid regulatory pressures.
- UK fundraising for PE reached $65 billion in 2022, leading Europe.
- Insurance companies committed $50 billion to PE funds in 2022 globally.
- Growth equity funds raised $210 billion in 2022, 17% of total PE fundraising.
- Latin America PE fundraising was $12 billion in 2022, up 10% YoY.
- Middle East & Africa contributed $18 billion to global PE fundraising in 2022.
- Number of PE funds in market fell to 15,000 by end-2022 from 16,500 in 2021.
- Family offices invested $25 billion in PE fundraising in 2022.
- Distressed debt funds raised $35 billion in 2022 amid market volatility.
- Canada-based fundraising for PE was $28 billion in 2022.
- Australia & New Zealand PE fundraising totaled $15 billion in 2022.
- Endowment funds committed $40 billion to PE in 2022 globally.
- Sector-focused PE funds (e.g., healthcare) raised $180 billion in 2022.
- Global PE fundraising distributions averaged 1.8x multiples in 2022.
Fundraising Interpretation
Despite shattering its own record with a staggering $1.21 trillion haul, the global private equity industry in 2022 resembled a cautious giant, concentrating its immense power into fewer, larger North American buyout funds while newer managers and venture bets found it a much tougher, slower climb.
Investments
- Global PE dry powder stood at $2.56 trillion at end-2022.
- PE investment value reached $892 billion in 2022 across 14,198 deals.
- Buyout investments dominated with $617 billion deployed in 2022, 69% of total.
- North America saw $380 billion in PE investments in 2022, 43% of global activity.
- Europe PE investments totaled $260 billion in 2022, down 25% from 2021.
- Asia-Pacific PE deal value was $160 billion in 2022, with India leading at $45 billion.
- Average PE deal size increased to $64 million in 2022 from $58 million in 2021.
- Venture investments within PE hit $230 billion in 2022 across 25,000 deals.
- Growth equity deployments reached $195 billion in 2022, up 5% YoY.
- Healthcare sector received $145 billion in PE investments in 2022, 16% of total.
- Technology sector PE investments were $210 billion in 2022 globally.
- Infrastructure investments by PE totaled $98 billion in 2022 across 450 deals.
- Add-on deals accounted for 58% of buyout transactions in 2022, totaling 8,200 deals.
- US PE investments numbered 6,500 deals worth $380 billion in 2022.
- UK received $55 billion in PE investments in 2022, focusing on consumer sectors.
- China PE investments fell to $38 billion in 2022, down 50% YoY.
- Financial services sector attracted $85 billion in PE capital in 2022.
- Mega-deals over $1 billion numbered 210 in 2022, totaling $320 billion.
- Latin America PE investments reached $14 billion in 2022, led by Brazil.
- Consumer & retail PE deals value was $110 billion in 2022.
- Industrial sector received $120 billion from PE investors in 2022.
- Secondaries transactions hit $105 billion in 2022, up 30% YoY.
- Middle East PE investments totaled $20 billion in 2022, infrastructure heavy.
- Energy sector PE deployments were $45 billion in 2022 amid transition focus.
- Number of PE deals globally was 14,198 in 2022, down 20% from 2021.
- Co-investment activity in PE reached $70 billion in 2022.
- Business services sector got $95 billion in PE investments 2022.
- India PE investments surged to $48 billion in 2022, tech-driven.
Investments Interpretation
Despite sitting on a record-breaking $2.56 trillion war chest, private equity barons in 2022 channeled their cautious aggression into fewer but bolder mega-deals, fortifying existing empires with add-ons, chasing digital and health bets from Silicon Valley to Bangalore, while giving a wide berth to a skittish Europe and a retreating China.
Performance
- Global PE gross IRR averaged 15.2% for vintages 2018-2022.
- Top-quartile PE funds delivered 22.1% net IRR through 2022.
- Median DPI for mature PE funds was 1.75x as of end-2022.
- Buyout funds averaged 2.1x TVPI for 2017 vintage by 2022.
- VC funds net IRR was 18.5% for top quartile in 2022 data.
- North America PE funds outperformed with 16.8% average IRR.
- Europe PE median multiple was 1.9x MOIC through 2022.
- Growth equity IRR averaged 20.3% for recent vintages in 2022.
- Infrastructure PE funds TVPI hit 1.6x median by end-2022.
- PE outperformance vs public markets was 450 bps annualized to 2022.
- Secondaries funds delivered 14.2% IRR net in 2022 benchmarks.
- Asia PE funds averaged 13.5% IRR, lagging developed markets.
- J-curve depth for PE funds averaged -5% in year 1, recovering by year 4.
- Top 10% PE managers achieved 28%+ IRR through 2022.
- Healthcare PE subsector IRR was 17.8% median in 2022.
- Technology PE TVPI averaged 2.4x for exited funds by 2022.
- Dispersion in PE returns: top quartile 22% vs bottom 8% IRR.
- Mature buyout funds DPI reached 1.85x globally in 2022.
- Public to private PE deals yielded 25% average IRR since inception.
- RVPI for unrealized PE portfolios averaged 1.45x in 2022.
- US small-cap PE outperformed large-cap by 300 bps to 2022.
- Distressed PE strategies returned 16.1% IRR in 2022 cycle.
- Fee compression reduced management fees to 1.6% average in 2022.
- Carried interest realization rate was 12% for mature funds in 2022.
- Europe mid-market PE IRR hit 18.2% for 2019 vintage by 2022.
Performance Interpretation
Despite the industry's notorious J-curve, where managers pocket fees before returns even turn positive, the data insists that top-tier private equity funds have consistently delivered stellar, market-beating profits, provided you avoid the vast majority of underperformers lurking in the bottom quartile.