While global private equity fundraising still reached a staggering $1.17 trillion in 2023, a closer look reveals an industry in a moment of profound recalibration, where dry powder hit a record $2.6 trillion even as mega-funds captured nearly half of all capital and the average time to close a fund stretched to 21 months.
Key Takeaways
- Global private equity fundraising totaled $1.17 trillion in 2023, the second-highest year on record despite a 24% decline from the 2022 peak.
- North American PE funds raised $486 billion in 2023, accounting for 42% of global totals.
- The number of PE funds closed in 2023 dropped to 1,987, down 31% from 2022.
- Global PE dry powder hit $2.6 trillion by Q1 2024, up 5% QoQ.
- PE deal value reached $743 billion in 2023, down 21% from 2022.
- Number of PE deals globally was 14,800 in 2023, flat YoY.
- Global PE exit value was $486 billion in 2023, down 28% YoY.
- Number of PE exits dropped to 7,400 in 2023 from 9,800 in 2022.
- IPO exits for PE fell to 180 in 2023, raising $42 billion.
- Global PE net IRR for 2023 vintages averaged 15.2%.
- Buyout funds delivered median TVPI of 1.75x as of 2023.
- Top quartile PE funds achieved 22% net IRR through 2023.
- Global PE AUM grew to $5.8 trillion by end-2023.
- Dry powder represented 44% of total PE AUM in 2023.
- Number of PE firms worldwide reached 12,500 in 2023.
Private equity fundraising remains strong but slowed significantly in a tougher 2023 market.
AUM and Trends
- Global PE AUM grew to $5.8 trillion by end-2023.
- Dry powder represented 44% of total PE AUM in 2023.
- Number of PE firms worldwide reached 12,500 in 2023.
- Fee income for PE managers totaled $145 billion in 2023.
- LP commitments to PE hit $1.4 trillion over 2019-2023.
- Concentration: Top 20 managers controlled 30% of AUM in 2023.
- ESG-integrated PE AUM grew 15% to $1.2 trillion in 2023.
- Digital infrastructure AUM in PE doubled to $250B by 2023.
- Sovereign wealth funds held 25% of global PE AUM in 2023.
- Retail investor PE AUM via platforms reached $150B in 2023.
- PE penetration in emerging markets AUM was 12% in 2023.
- Carried interest realizations hit $50 billion for managers in 2023.
- 55% of PE AUM was in buyout strategies in 2023.
- Tech allocation in PE portfolios averaged 18% AUM in 2023.
- Fee compression reduced management fees to 1.6% avg in 2023.
- Secondaries AUM grew 20% to $450 billion in 2023.
- Continuation vehicles AUM reached $40 billion by end-2023.
- PE AUM per professional averaged $1.2 billion in 2023.
- 68% of LPs increased PE allocations to 15% of portfolios in 2023.
- NAV discounts in PE secondaries averaged 12% in 2023.
- Private credit crossover to PE AUM added $300B by 2023.
- Regional AUM: North America 55%, Europe 25%, APAC 15% in 2023.
- GP stakes market AUM hit $35 billion in 2023.
- AI-themed PE AUM surged 40% to $180B in 2023.
- Uncalled commitments stood at $3.1 trillion end-2023.
- PE industry headcount grew 4% to 285,000 in 2023.
AUM and Trends Interpretation
The private equity world now resembles a gilded behemoth, impressively swollen with a record $5.8 trillion in assets and $145 billion in fees, yet it nervously clutches a $3.1 trillion pile of uncalled commitments and enough dry powder to cement over several small countries, all while its top surgeons fight fee compression and its clients increasingly demand both digital infrastructure and moral infrastructure.
Deal Activity
- Global PE dry powder hit $2.6 trillion by Q1 2024, up 5% QoQ.
- PE deal value reached $743 billion in 2023, down 21% from 2022.
- Number of PE deals globally was 14,800 in 2023, flat YoY.
- Buyout deals accounted for 58% of PE transaction value in 2023.
- Add-on deals surged 12% to 7,200 in 2023, 49% of total deals.
- US PE deal count was 7,100 in 2023, down 3%.
- Europe saw 3,200 PE deals in 2023, value down 30% to $210 billion.
- Asia-Pacific PE deals totaled $180 billion in value in 2023.
- Mega-deals (over $5 billion) numbered 48 in 2023, down from 72.
- Technology sector captured 22% of PE deal value in 2023.
- Healthcare PE deals rose 5% in count to 1,800 in 2023.
- Average PE entry multiple was 12.5x EBITDA in 2023.
- Sponsor-to-sponsor deals hit record 1,050 in 2023, 22% of buyouts.
- Infrastructure deals reached $140 billion in 2023, up 8%.
- Leveraged loan volume for PE deals was $650 billion in 2023.
- 65% of PE deals used unitranche financing in 2023.
- Consumer sector PE deals fell 25% in value to $85 billion in 2023.
- India PE deal value hit $47 billion in 2023, led by tech.
- Divestiture deals by PE sponsors numbered 2,100 in 2023.
- Average deal size for buyouts was $285 million in 2023.
- Energy transition deals in PE reached $35 billion in 2023.
- 42% of 2023 deals were in lower middle market (EBITDA <$50M).
- Cross-border PE deals declined 18% to 3,500 in 2023.
- Software & IT services took 15% of PE deal value in 2023.
- Real estate PE deals totaled $120 billion in 2023.
- 28% rise in PE carve-out deals to 650 in 2023.
- Latin America PE deals valued at $18 billion in 2023.
- PE take-privates numbered 220 globally in 2023, value $110B.
Deal Activity Interpretation
Armed with a record $2.6 trillion war chest but spooked by high interest rates, private equity is playing a cautious game of musical chairs, buying smaller, safer companies from each other while eyeing a few big, expensive bets in technology and infrastructure.
Exits
- Global PE exit value was $486 billion in 2023, down 28% YoY.
- Number of PE exits dropped to 7,400 in 2023 from 9,800 in 2022.
- IPO exits for PE fell to 180 in 2023, raising $42 billion.
- Trade sales accounted for 65% of exit value in 2023.
- Secondary buyouts hit 2,300 deals, 31% of total exits in 2023.
- US PE exits totaled $240 billion in value in 2023.
- Europe PE exit value plunged 40% to $110 billion in 2023.
- Average exit multiple achieved 2.3x invested capital in 2023.
- Strategic acquirers bought 55% of PE exits by count in 2023.
- Asia PE exits valued $85 billion in 2023, down 15%.
- Full realizations (100% exits) numbered 1,650 in 2023.
- Sponsor-to-sponsor exits captured 38% of exit value in 2023.
- Healthcare sector led PE exits with $75 billion in 2023.
- Median holding period for exited deals was 5.2 years in 2023.
- 22 mega-exits (over $1B) occurred in 2023, down from 35.
- India PE exits reached $25 billion in 2023 via trade sales.
- Distributions to Paid-In (DPI) averaged 0.18x for 2023 exits.
- UK PE exits fell 35% to $22 billion in 2023.
- Tech exits by PE totaled $60 billion in 2023.
- 47% of exits were partial sales in 2023.
- Infrastructure PE exits hit $55 billion in 2023.
- China PE exits dropped 50% to $20 billion in 2023.
- Average MOIC for 2023 exits was 2.1x.
- Latin America PE exits valued $8 billion in 2023.
- 18% of PE portfolios were exited in 2023 by count.
Exits Interpretation
Despite a sharp global slowdown in exits, private equity firms demonstrated a resilient, if not spectacular, pragmatism in 2023 by leaning heavily on trade sales and secondary buyouts to pass the baton, proving that even in a tough market you can still get a deal done—just don’t expect a parade.
Fundraising
- Global private equity fundraising totaled $1.17 trillion in 2023, the second-highest year on record despite a 24% decline from the 2022 peak.
- North American PE funds raised $486 billion in 2023, accounting for 42% of global totals.
- The number of PE funds closed in 2023 dropped to 1,987, down 31% from 2022.
- Mega-funds (over $5 billion) captured 46% of total PE capital raised in 2023.
- European PE fundraising fell 36% to $162 billion in 2023 amid economic headwinds.
- Asia-Pacific PE funds raised $95 billion in 2023, a 15% YoY decline.
- First-time PE funds raised $32 billion in 2023, representing 3% of global totals.
- Average time to close a PE fund in 2023 was 21 months, up from 19 months in 2022.
- Buyout funds dominated fundraising with $785 billion raised in 2023, or 67% of totals.
- Growth equity funds raised $124 billion in 2023, down 18% from prior year.
- US PE fundraising hit $506 billion in 2023, led by mega-funds from KKR and Blackstone.
- Dry powder reached $2.55 trillion at end-2023, including $1.06 trillion in buyout dry powder.
- 58% of PE LPs planned to increase allocations in 2024 per a 2023 survey.
- Secondary funds raised $85 billion in 2023, up 22% YoY.
- Latin America PE fundraising dropped to $6.8 billion in 2023 from $12.5 billion in 2022.
- Middle East & Africa PE funds raised $14 billion in 2023, focused on sovereign wealth.
- Venture capital arms of PE firms raised $45 billion within PE totals in 2023.
- 72% of 2023 fundraises took longer than 18 months to close.
- Top 10 PE managers raised 35% of 2023 global capital.
- Infrastructure PE funds raised $112 billion in 2023, 10% of total PE.
- Distressed debt funds within PE raised $22 billion in 2023.
- Canadian PE fundraising totaled $28 billion in 2023, down 12%.
- Australian PE funds raised $15.4 billion in 2023, led by buyouts.
- 41% of LPs reported fundraising difficulties in 2023 surveys.
- Co-investment vehicles raised $18 billion in PE space in 2023.
- Evergreen PE funds raised $9.5 billion in 2023, growing segment.
- UK PE fundraising fell to $38 billion in 2023 from $65 billion peak.
- China PE fundraising dropped 45% to $47 billion in 2023.
- India PE/VC fundraising hit $39 billion in 2023, resilient market.
- Total PE commitments from pensions rose 8% to $145 billion in 2023.
Fundraising Interpretation
The private equity industry is having a dramatic, slow-motion consolidation, where the largest players are hoarding capital like dragons on a pile of gold, leaving everyone else to fight over the scraps while the world nervously waits to see what they'll buy with it.
Performance Metrics
- Global PE net IRR for 2023 vintages averaged 15.2%.
- Buyout funds delivered median TVPI of 1.75x as of 2023.
- Top quartile PE funds achieved 22% net IRR through 2023.
- Vintage 2020 PE funds had pooled IRR of 18.5% by end-2023.
- DPI for mature PE funds averaged 0.22x in 2023.
- US buyout IRR median was 16.8% for funds 2018-2023.
- European PE funds underperformed public markets by 2% annualized to 2023.
- Growth equity median IRR hit 20.1% for 2019 vintages in 2023.
- Infrastructure PE delivered 12.5% IRR median through 2023.
- Secondaries funds achieved 14.2% net IRR in 2023 benchmarks.
- 65% of PE funds outperformed S&P 500 over 10 years to 2023.
- Median PME for PE was 1.12x vs public indices in 2023.
- Venture-backed PE subsets saw 25% IRR top quartile in 2023.
- Holding period IRR averaged 21% for 5-year exits in 2023.
- Asia PE median IRR was 13.5% for 2020-2023 vintages.
- Distressed PE strategies returned 28% IRR in 2023.
- J-curve depth for new PE funds averaged -5% in year 1 to 2023.
- 72% of LPs satisfied with PE returns in 2023 surveys.
- Buyout MOIC median 2.4x for vintages pre-2020 in 2023.
- Public market equivalent (PME) >1.2x for 58% of funds to 2023.
- Net multiple to paid-in averaged 1.9x for exited portfolios 2023.
- Top 25% PE managers delivered 2x gross MOIC in 2023 data.
- RVPI for unrealized PE was 1.45x median in 2023.
- 10-year annualized PE return was 14.7% to Dec 2023.
Performance Metrics Interpretation
While private equity’s headline returns sparkle, the real story is that the sector is a game of exceptional dispersion, where top funds feast and average ones sometimes just politely snack.
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