While global private equity fundraising reached a record-breaking $1.2 trillion in 2023, a closer look reveals an industry in the midst of a profound and contrasting transformation.
Key Takeaways
- In 2023, global private equity fundraising totaled $1.2 trillion, marking a 10% increase from 2022 despite economic headwinds
- North American PE firms raised $486 billion in 2023, accounting for 40% of global totals
- The number of PE funds closed in 2023 was 2,456, down 15% from the previous year
- Global PE deal value reached $743 billion in 2023, down 22% from 2022
- Number of PE deals globally was 14,500 in 2023, a 25% decline YoY
- US VC investment totaled $130.2 billion across 12,000 deals in 2023
- Global exits from PE portfolios reached $462 billion in 2023, down 28% YoY
- Number of PE exits globally was 7,800 in 2023, down 20%
- IPOs accounted for 15% of PE exits by value in 2023, totaling $70 billion
- Net IRR for top-quartile PE funds averaged 18.5% as of 2023 vintage
- Global PE pooled IRR was 14.2% for 2018-2023 vintages
- US VC median TVPI was 2.1x for 2019 vintage funds in 2023
- Number of PE firms worldwide exceeded 5,000 in 2023
- VC deal share in AI/ML rose to 20% of total VC in 2023
- PE dry powder to GDP ratio hit 3.5% globally in 2023
Private equity fundraising grew while venture capital faced declines last year.
Exits
- Global exits from PE portfolios reached $462 billion in 2023, down 28% YoY
- Number of PE exits globally was 7,800 in 2023, down 20%
- IPOs accounted for 15% of PE exits by value in 2023, totaling $70 billion
- Strategic sales made up 55% of PE exit value in 2023
- US VC exits generated $85 billion in 2023
- Secondary buyouts represented 30% of PE exits in 2023, value $140 billion
- Average MOIC for exited PE deals was 2.4x in 2023
- European PE exit value was €85 billion in 2023, down 35%
- VC M&A exits totaled $50 billion globally in 2023
- Number of PE IPOs was 120 in 2023, raising $60 billion
- Asia PE exits reached $90 billion in 2023, led by trade sales
- Median holding period for PE exits shortened to 4.8 years in 2023
- US PE exit multiples averaged 14.2x EBITDA in 2023
- Continuation vehicle exits generated $20 billion in 2023
- Global VC IPOs numbered 45 in 2023, down from 150 in 2021
- PE sponsor-to-sponsor exits hit 2,300 deals in 2023
- Healthcare PE exits were $100 billion in 2023
- India VC exits totaled $6.5 billion in 2023
- Average gross IRR for exited VC deals was 25% in 2023 cohorts
- Secondary transactions in PE reached $135 billion in 2023, up 25%
- UK PE exits were £35 billion in 2023
- Fintech VC exits generated $15 billion in 2023
- Global PE distributions to LPs were $400 billion in 2023
- Biotech VC exits totaled $18 billion in 2023
- Latin America VC exits were $2.8 billion in 2023
- PE exit activity in Q4 2023 rebounded 15% QoQ
Exits Interpretation
Amidst a global market downturn, the exit landscape reveals a resilient, if pragmatic, industry: sponsors are trading trophy exits for dependable strategic sales and sponsor-to-sponsor handoffs, proving that while the party’s music slowed, the dealmakers simply found new dance partners.
Fundraising
- In 2023, global private equity fundraising totaled $1.2 trillion, marking a 10% increase from 2022 despite economic headwinds
- North American PE firms raised $486 billion in 2023, accounting for 40% of global totals
- The number of PE funds closed in 2023 was 2,456, down 15% from the previous year
- Average fund size for PE buyout funds reached $1.1 billion in 2023, up from $950 million in 2022
- Venture capital fundraising in Europe hit €25 billion in 2023, a 25% decline YoY
- Dry powder in private equity stood at $2.55 trillion at the end of 2023
- Asia-Pacific PE fundraising reached $150 billion in 2023, led by China and India
- Mega-funds (over $5 billion) accounted for 45% of total PE capital raised in 2023
- First-time PE funds raised $45 billion in 2023, representing 3.8% of total fundraising
- Continuation funds raised $50 billion in 2023, up 20% from 2022
- US VC funds raised $78.5 billion in 2023 across 1,025 funds
- European PE dry powder hit €500 billion by end-2023
- Global VC fundraising declined 38% to $269 billion in 2023 from 2022 peak
- PE secondaries fundraising reached $85 billion in 2023, a record high
- Latin America VC fundraising totaled $3.2 billion in 2023, down 45% YoY
- In 2023, 65% of PE capital was raised by firms with over $10 billion AUM
- Growth equity funds raised $120 billion globally in 2023
- Time to close for PE funds averaged 22 months in 2023, up from 19 months in 2021
- Sovereign wealth funds committed $70 billion to PE in 2023
- Family offices increased PE allocations to 15% of portfolios in 2023 surveys
- Global PE capital raised in H1 2024 reached $349 billion, down 24% YoY
- VC funds in India raised $8.9 billion in 2023
- PE fundraising from pensions hit $150 billion in 2023
- Number of PE funds in market dropped to 4,000 in 2023 from 5,500 peak
- US mega VC funds (over $1B) numbered 45 in 2023
- European VC early-stage fundraising was €12 billion in 2023
- Global infrastructure PE fundraising was $110 billion in 2023
- PE funds targeting AI raised $30 billion in 2023
- Average DPI target for new PE funds rose to 1.8x in 2023
- In 2023, global buyout fundraising was $685 billion, 57% of total PE
Fundraising Interpretation
In 2023, the private equity and venture capital industry demonstrated a defiant, if not selective, optimism, as a record-breaking sum of dry powder now sits impatiently in fewer, larger funds, proving that even in a downturn, money still has a favorite club, but getting past the velvet rope just got a lot harder.
Investments
- Global PE deal value reached $743 billion in 2023, down 22% from 2022
- Number of PE deals globally was 14,500 in 2023, a 25% decline YoY
- US VC investment totaled $130.2 billion across 12,000 deals in 2023
- Mega-deals (over $1 billion) in PE numbered 380 in 2023, 30% down
- European PE investments were €120 billion in 2023, down 28% YoY
- VC investment in AI startups hit $42.5 billion in 2023 globally
- Average PE entry multiple was 12.5x EBITDA in 2023, down from 14.2x
- Late-stage VC deals averaged $50 million in 2023
- Asia PE deal count was 3,200 in 2023, value $180 billion
- Sector-wise, healthcare PE investments were $150 billion in 2023
- Add-on deals comprised 62% of total PE transactions in 2023
- India VC funding reached $8.9 billion across 1,200 deals in 2023
- Global VC seed funding was $20 billion in 2023, down 40% YoY
- PE investments in software sector hit $100 billion in 2023
- Average VC round size grew to $15 million in 2023 from $12 million
- Latin America VC investments totaled $4.1 billion in 2023
- UK PE deal value was £45 billion in 2023
- Fintech VC funding globally was $28 billion in 2023, down 45%
- PE controlcar investments averaged 45% equity stake in 2023
- Climate tech VC investments reached $25 billion in 2023
- China PE deal value was $70 billion in 2023, down 30%
- US PE buyout deals numbered 2,800 in 2023, value $450 billion
- Median VC valuation for Series A was $45 million in 2023
- PE co-investments grew to $60 billion in 2023
- Biotech VC funding was $22 billion across 1,500 deals in 2023
- Global PE debt financing for deals averaged 45% of enterprise value in 2023
- Early-stage VC deal count was 5,200 globally in 2023
- PE investments in consumer sector totaled $80 billion in 2023
Investments Interpretation
The industry tightened its belt with a disciplined sigh in 2023, writing fewer but bigger checks, proving that even in a cautious market, the smart money still knows how to find a promising deal and a comfortable majority stake.
Performance
- Net IRR for top-quartile PE funds averaged 18.5% as of 2023 vintage
- Global PE pooled IRR was 14.2% for 2018-2023 vintages
- US VC median TVPI was 2.1x for 2019 vintage funds in 2023
- Average MOIC for PE buyouts was 2.6x across exited deals to 2023
- Top-quartile VC funds delivered 28% net IRR for 2017 vintage in 2023
- PE DPI globally reached 0.18x for 2020 vintage by end-2023
- European PE IRR averaged 12.5% for mature funds in 2023
- VC gross multiples averaged 3.2x for 2016-2020 vintages
- PE fund J-curve deepened with negative returns in year 1 averaging -5%
- Asia PE top-quartile IRR was 20.1% for 2015-2020 funds
- Median PE fund TVPI was 1.45x for 2017 vintage in 2023
- VC seed stage median IRR was 15% for mature funds to 2023
- PE value creation from operational improvements averaged 40% of total returns in 2023 studies
- Global PE PME was 1.25x vs public markets to 2023
- Late-stage VC TVPI averaged 1.8x for 2020 vintages
- PE buyout IRR dispersion: top quartile 22%, bottom 8% in 2023 data
- India VC IRR for top funds exceeded 30% annualized to 2023
- PE NAV sensitivity to rate hikes reduced returns by 200bps in 2023
- Growth equity median MOIC was 2.2x for exited portfolios to 2023
- VC power law distribution: top 1% deals drove 50% returns in 2023 analyses
- PE fund fee compression: management fees down to 1.4% in 2023
- UK VC DPI was 0.12x for recent vintages in 2023
- Global PE unrealized value grew 8% in 2023 despite slowdowns
- Biotech VC median IRR was 10% for 2015-2020 funds
- PE leverage contributed 25% to returns in 2023 exited deals
- Fintech VC top-quartile IRR hit 35% for 2018 vintages
Performance Interpretation
In the high-stakes theater of private equity and venture capital, the stark truth is that while top performers bask in returns north of 20%, the median fund barely keeps pace with a solid public market benchmark, revealing an industry powered by a punishing power law, generous leverage, and management fees that are—thankfully—slowly shrinking.
Trends
- Number of PE firms worldwide exceeded 5,000 in 2023
- VC deal share in AI/ML rose to 20% of total VC in 2023
- PE dry powder to GDP ratio hit 3.5% globally in 2023
- Women-led VC funds managed $15 billion AUM in 2023, up 20%
- ESG integration in PE funds reached 85% in 2023 surveys
- VC investment concentration: top 10% startups got 60% funding in 2023
- PE multiple arbitrage declined to 200bps premium in 2023
- Rise of specialist PE funds: 40% focused on one sector in 2023
- VC geographic concentration: 50% funding in 5 global hubs in 2023
- PE GP-led secondaries grew to 20% of secondary volume in 2023
- Adoption of AI in PE operations reached 60% of firms in 2023
- VC down rounds increased to 15% of total rounds in 2023
- PE interest in emerging markets rose to 25% of deals in 2023
- Number of unicorn startups grew to 1,200 by end-2023
- PE fund terms: 50% now include LP co-investment rights in 2023
- VC stage shift: late-stage 45% of value in 2023 vs 30% in 2020
- Regulatory scrutiny on PE increased 30% in filings in 2023
- PE tech stack investments hit $5 billion annually by 2023
- Diversity in PE: 18% female managing partners in 2023, up from 12%
- VC syndication networks shrank 10% post-2022 in 2023 data
Trends Interpretation
Despite the industry's hopeful spread of ESG, AI enthusiasm, and emerging market curiosity, the growing concentration of capital, power, and regulatory attention reveals a mature field grappling with the paradox of being everywhere at once while still betting on the same few horses.
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