Die auf dieser Website beschriebenen Dienstleistungen sind unter Umstnden nicht in allen Rechtsgebieten oder fr alle Kunden verfgbar. For those that can identify and partner with such private equity managers, there exists a promising opportunity for outperformance in the region. Deal volume fell 20 percent, declining in each consecutive quarter throughout the year (Exhibit 5). FT Adviser. Private markets have enjoyed strong tailwinds since the depths of the Global Financial Crisis (GFC). PDF 2016 Preqin Global Private Equity & Venture Capital Report He leads the Private Market team in shaping the strategic direction of the program, plays an active role in sourcing, monitoring of investments and serves on various underlying partnership advisory boards.s. Further, there is a local-global arbitrage opportunityidentifying a company at a well-priced local market entry valuation, repositioning the company for global markets, and exiting at a premium valuation commensurate with a global company. Beyond robust GDP growth, under-penetration in many sectors creates opportunity for accelerated growth. A Private Equity Lens on the Energy Transition The global shift away from carbon-based fuels is gaining momentum. IPM monthly blog - Edition April 2023 | UBS Global PDF Preqin Global Private Equity Venture Capital Report This document is disseminated in Japan by MSIMJ, Registered No. Private equity funds continued to deliver returns outpacing any other asset class. S&P Global Market Intelligence Retrieved from: https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/private-equity-managers-expect-another-boom-year-in-2022-68394243, [3] Preqin Pro, (as of 07/02/2022). Preqin Quarterly Update: Venture Capital Q4 2022 | Preqin It has been a positive year for ESG with a broad recognition of ESGs importance from all stakeholders and acknowledgement of its role in value creation. In the context of elevated investment levels, this likely suggests that investors are growing wary of risks such as inflation, rising interest rates and high valuations that could put the brakes on this unprecedented pace of transactions.[2]. Office, retail, and hospitalitythe sectors most affected by pandemic-driven changes in working, shopping, and travelingshowed signs of emerging stability. www.capitaliq.spglobal.com, [5] Investing in the next generation of healthcare opportunities. In 2022, mezzanine strategies were most in favor, posting record fundraising totals and more than tripling 2021s haul. Venture capital is gearing up for a cold spell as portfolio companies' growth and fundraising are slowing. Labor shortages in the wake of the pandemic are undoubtedly playing a role in the overall picture. Source: Preqin Pro as of September 30, 2022, COPYCAT MODELS ACCELERATING GROWTH Nutzungsbedingungen. AUM has now grown at an annual rate of nearly 20 percent since 2017. Weitere Einzelheiten knnen aus unseren Nutzungsbedingungen entnommen werden. We work with ambitious leaders who want to define the future, not hide from it. Source: S&P Capital IQ as of 28 February 2023. It conducted a debut survey of firms in this sector, gathering professional insights and opinions on how they are likely to fare in 2022 in terms of fundraising, dry powder, regulations, ESG considerations, private equity operations, investing areas, strategies, outsourcing, valuations and exits. Registered Office: 25 Cabot Square, Canary Wharf, London E14 4QA. As bank financing dried up in the second half of the year, private lenders stepped into the void, providing financing for more than 80 percent of PE transactions in the middle market. The decline was most evident in Europe and Asia, while fundraising in North America increased slightly (Exhibit 1). For example, recent McKinsey research found that publicly traded ESG outperformers that also outperformed peers on margin and growth delivered 200 basis points in excess return to their shareholders over companies that only outperformed financially.6McKinsey research to be published. (As of 16/11/2021). In addition to the copycat model, Asian markets have demonstrated a leapfrog phenomenonwhereby one region replicates and rapidly improves upon an innovation witnessed elsewhere. MSIM will look to address these risks/opportunities in future briefs. Real estate (23 percent) and private equity (15 percent) declined most precipitously from 2021s record highs, while private credit (+2 percent) proved more resilient. Global private markets fundraising declined by 11 percent to $1.2 trillion. Alternative investments typically have higher fees and expenses than other investment vehicles, and such fees and expenses will lower returns achieved by investors. The diversity of strategies within private debt also helps explain its consistent growth. OVERVIEW OF THE INDUSTRY Executive Summary Despite the economic slowdown triggered by the pandemic, global private equity & venture capital AUM has increased by 6.1% from the end of 2019, to $4.74tn as of June 2020. Exits in the region are notoriously complicated, as tighter public markets limit IPO options and geopolitical uncertainty clouds valuations. It's our market overview from Bain & Company's 2022 Global Private Equity Report. The largest five managers accounted for 29 percent of all fundraising, the highest share of the last decade, and tenants favored class A real estate as they fought to attract and retain employees. Changes in consumer behavior is no longer one of the top five factors of concern, decreasing to 17% this year from 26% in 2021%) as firms now have a better gauge of consumer reactions to the pandemic and have adjusted their strategies accordingly. Conversely, dollars raised by sub$5 billion funds decreased by 28 percent. This article is a summary of a larger report, available as a PDF, that is a collaborative effort by Pontus Averstad, Alejandro Beltrn, Marcel Brinkman, Paul Maia, Gary Pinshaw, David Quigley, Aditya Sanghvi, John Spivey, and Brian Vickery, representing views from McKinseys Private Equity & Principal Investors Practice. Since these charges and expenses are different depending on a contract and other factors, MSIMJ cannot present the rates, upper limits, etc. Still, private markets outperformed public markets on the way down, whether due to truly more resilient portfolios, a lag in timing, or manager discretion over their marks (private markets tend to mark up less quickly during ascending markets and mark down less quickly in falling markets). Mobile solutions such as real-time online loans to the unbanked, leveraging digital information, cross-border transfers at lower friction/cost, etc., are all helping to boost financial inclusion in Southeast Asia. In total, 2,543 funds held a final close, a 14% increase on the previous years tally. More private markets managers are incorporating considerations for ESG factors into their corporate policies, operating procedures, and investment decisions. As in 2020, when private debt was the only private asset class that recorded fundraising growth, investors ability to allocate to one or another strategy based on the prevailing market environment has contributed to consistent top-line growth through business cycles (Exhibit 7). Conclusion After making an investment, GPs have five value creation levers they can pull to improve their portfolio: Pontus Averstad is a senior partner in McKinseys Stockholm office; Alejandro Beltrn is a senior partner in the Madrid office;Marcel Brinkman is a partner in the London office; Paul Maia is a partner in the New Jersey office; Gary Pinshaw is a senior partner in the Sydney office; David Quigley is a senior partner in the New York office, where Aditya Sanghvi is a senior partner; andJohn Spivey is an associate partner in the Boston office, where Brian Vickery is a partner. Concerns about the availability of skills and talent as a threat to the growth of portfolio companies have doubled from last year, climbing to 36% from only 17% in 2021. This has played out among Korean tech companies where early-stage investments are limited to local VCs, keeping valuations modest. Yet, like most private market segments, real estate experienced a downturn in 2022 compared with the record year it followed. Outside the US and EU, Eaton Vance materials are issued by Eaton Vance Management (International) Limited ("EVMI") 125 Old Broad Street, London, EC2N 1AR, UK, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority. PDF PREQIN GLOBAL - bebeez.it This material was not intended or written to be used, and it cannot be used with any taxpayer, for the purpose of avoiding penalties which may be imposed on the taxpayer under U.S. federal tax laws. S&P Capital IQ Pro. Markets climbed higher still, awash with central-bank-induced liquidity. On the surface, historical private equity (PE) performance in Asia has been shown to be on par with performance numbers generated in other regions. 2022 will prove to be the best year yet for ESG-focused fundraising, with $24 billion raised through the first half of the year. The discrepancy this year drove private market allocations higher on a percentage basis across institutional portfolioscloser to preexisting targets for most, and above targets for many limited partners (LPs)triggering the so-called denominator effect. Similarly, Australian software companies can be invested in at modest high single-digit/low double-digit EV/ EBITDAs and sold on to global strategics at premium double-digit EV/EBITDAs. Beyond China (which is currently facing its own challenges), leapfrog potential exists in other parts of Asia. Fundraising hit a new record in 2021 with established fund managers riding the wave. Notwithstanding these risks, a variety of factorsaccelerated growth/leapfrog potential in underpenetrated industries, opaque and attractive valuations relative to developed markets, and overlooked opportunities for improvements in operational efficiencycontribute to the regions potential for outperformance. Concerns over start-ups' high burn rate and limited exit options caused by a global equity sell-off have extended funds' holding periods and slowed capital distribution. Tech-focused buyout funds performed worse than other buyout funds for the second consecutive year, and venture capital (VC) underperformed buyout strategies for the first time since 2017. *I have read thePrivacy Policyand agree to its terms. Persons considering an alternative investment should refer to the specific investments offering documentation, which will fully describe the specific risks and considerations associated with such investment. According to Preqin data,[3]aggregate capitalraised by growth funds hit a new record of $136 billion, up by 60% on the previous year and exceeding the 5-year average of $114 billion. Beyond localized operations, the ability to adapt to unique customs can be both a hurdle and opportunity. Private markets fundraising fell 11 percent to $1.2 trillion, as the denominator effect affected some LPs ability to allocate capital. In 2017, for example, China represented 83 percent of fundraising in Asia, a share that dropped to 34 percent in 2022. For illustrative purposes only. McKinsey Global Private Markets Review 2023 | McKinsey On the supply side, the closing of a record number of global megafunds boosted fundraising. In almost every regard, 2021 was an exceptional year (as we highlightedin last years report) but it was not a trend breaker. 2022 Preqin Global Venture Capital Report | Preqin [5]In 2021, deal activity in Healthcare continued gaining momentum, not only in terms of deal count but also deal value, which reached $340 billion; Healthcare Technology deal counts contributed the most to the sectors dynamism.[6]. Private debt fundraising continued to grow last year (+2 percent), once again bucking the trend of other private asset classes. These disruptions had substantial and varied impacts on private markets fundraising, performance, and AUM growth, with steep declines in certain regions and strategies, and pockets of resilience in others. [7] S&P Capital IQ Pro Platform (as of 27/01/2022). Source: S&P Global Market Intelligence. In Switzerland, MSIM materials are issued by Morgan Stanley & Co. International plc, London (Zurich Branch) Authorised and regulated by the Eidgenssische Finanzmarktaufsicht (FINMA). Under-penetration of financial services and modern retail presented an opportunity for China to develop more advanced solutions than what existed in the West. PDF Private Equity Market Update - CAIA North America largely led this increase, accounting for 76% of the total deal value. For some strategies, a contingency fee may be incurred in addition to the fee mentioned above. The 18-month total of $1.7 trillion is by far the strongest year and a half in the industry's history (see Figure 3). Natural resources strategies, meanwhile, generated relatively strong performance for a second consecutive year, buoyed by elevated commodity prices. 6 Source: PPRO Asia Pacific, Western and Central Europe, North America Payments and e-commerce report 2022. 314182, which accept responsibility for its contents. Going into 2022, PE investors remain largely bullish on the investment activity outlook. Retrieved from: https://www.capitaliq.spglobal.com/web/client?auth=inherit#news/article?id=66494139. Jim Caron, Co-Lead Global Portfolio Manager and Co-Chief Investment Officer of the Global Balanced Risk Control (GBaR) Team, shares his macro thematic views on key market drivers. Political upheaval (26 %) and the high speed of technological changes (20%) round off the top five risk factors. PE buyout entry multiples declined slightly in 2022, falling to 12.9 times EBITDA from a record 13.2 times a year ago, while public market multiples compressed dramatically, declining to 12.0 from 14.6 times EBITDA. Global Private Equity Report 2023 | Bain & Company All investment profits and losses belong to the clients; principal is not guaranteed. Direct lending fundraising declined from 2021, but only marginally, raising over $100 billion for the second consecutive year. Macroeconomic headwinds, including rising inflation and interest rates, coupled with negative public market performance (17.7 percent) triggered the aforementioned denominator effect, and LPs scaled down new commitments. Hong Kong: This material is disseminated by Morgan Stanley Asia Limited for use in Hong Kong and shall only be made available to "professional investors" as defined under the Securities and Futures Ordinance of Hong Kong (Cap 571). Contenders for the third sector of choice are the Consumer (35%) and Industrials (34%) sectors. Beneath these headline statistics, revolutions in energy, mobility, and digitization are changing the face of infrastructure investing. Exit volume fell sharply, as sponsors chose to hold assets rather than sell into a declining-valuation environment. [9]Many PE investors now consider ESG factors when building and managing their portfolio. First-time fund launches also decreased by 40 percent. Like deal-making, fundraising also saw an upward growth trajectory in 2021 as money flew abundantly into private markets. This progress is a result of many factors. The client shall delegate to MSIMJ the authorities necessary for making investment. As measured by year-to-date IRR as of September 30, 2022, for global funds vintages between 2000 and 2019. Open-end funds in the US grew NAV by 24 percent, with contributions exceeding distributions for the first time in two years. Review sample excerpts of data and insights from our 2022 Global Alternatives Reports when you download the free Alternatives in 2022 report today.. Global alternatives AUM forecast to double by 2026, topping $23 Gbenga Oladeji oversees Global Private Markets for Johnson & Johnson Benefits Investment team. 9 Source: AVCJ, data as of September 30, 2022. For more from Dry Powder on the report, you can listen to Three Essential Trends . A United Nations-supported network of investors promoting sustainable investment. 2 Preqin, data as of September 2022. The deal-making momentum of 2021 continued through the first half of 2022, and despite the striking slowdown in second-half deal activity, 2022 remained the second most active year on record. Its 2022, and were coming off an extremely busy year in private equity. McKinseys Private Markets Annual Review: 2017 to 2022. Performance of every private markets asset class declined relative to 2021 but continued to outperform public market equivalents at current marks, though private market valuation changes often lag those in public markets. Additionally, the deal-making momentum of 2021 continued through the first half of the year before falling dramatically in the second, weighed down by reduced credit availability and valuation uncertainty. LP willingness to allocate more capital to diverse deal teams is prompting more GPs (52 percent in 202122) to share DEI data during fundraising. Japan: For professional investors, this document is circulated or distributed for informational purposes only. More than half of respondents (58%) highlighted it as the top risk factor to their portfolio. Real estate deal volume declined 20 percent to $1.1 trillion, also the second-highest year on record. Healthcare follows IT as the second top industry, up to 47% from 43% in 2021, attracting more investors as the sectorcontinues to offer opportunities, especially in the Healthcare Technology industry. Each MSIM affiliate is regulated as appropriate in the jurisdiction it operates. Example: 70% of all Europe-based investors responded that they are planning of making investments in Software & Services. The prevailing market uncertainty also served as a shot in the arm for private credit deployment opportunities. In the early 2000s, Chinas tech industry followed a copycat model, with consumers adopting technology that had proven successful in the U.S. [2] Private equity managers expect another boom year in 2022. 37% think it will remain the same, a slight increase over 2021 when only 27% of investors expected deal activity to remain flat. 37 How are increasing LP sophistication and diversification shaping the industry and the types of services GPs need to offer? In total, 24,520 deals were closed, with an aggregate deal value worth $1.04 trillion, nearly double the amount from the year before. As of the second quarter of 2022, dry powder exceeded $3 trillion, reflecting an 8.4 percent year-over-year increase and marking the eighth consecutive year of growth. Leapfrog tech potentially has the ability to further accelerate growth, thereby offering the opportunity for outsized returns. Globally, private equity generated $512 billion in buyout deal value during the first half of 2022, putting it on pace to produce the second-highest annual total ever (behind 2021's all-time record). Considerations for diversity, equity, and inclusion (DEI) have become an important part of the fundraising, hiring, and investing landscape in private markets.
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2022 preqin global private equity venture capital report