Bain & Co Global Private Equity Report 2024: Private Capital AUM at $14.5 Trillion, Dry Powder at $3.9 Trillion, 14,500 Funds Raising Average of $220 Million Per Fund Totalling $3.2 Trillion, Top 5 Largest Private Capital AUM are Buyout, Venture capital, Real estate, Growth & Infrastructure, Average Buyout Deal Value $788 Million, Top 5 Buyout Sectors by Deal Count Technology, Industrials, Services, Healthcare & Financial services, Buyout Median Holding Period 6.1 Years
22nd March 2024 | Hong Kong
Bain & Co has released the Bain & Co Global Private Equity Report 2024, providing key insights into global private capital (Private equity, venture capital, direct lending, real estate) data & trends in 2023 & 2024. In 2023, the Global Private capital AUM is at $14.5 trillion, and the Top 5 Largest Private Capital AUM in 2023 are Buyout, Venture capital, Real estate, Growth, Infrastructure. 2024 January fund raising – Around 14,500 funds, raising $3.2 trillion in capital ($220 million per fund)/. The Top 5 Most Dry Powder by Fund Type in 2023 (un-deployed capital) are Buyout, Venture capital, Real estate, Growth, Infrastructure. Global dry power in 2023 is at $3.9 trillion, and Buyout funds dry powder in 2023 is $1.2 trillion (31% of global dry powder). In 2024 January, around 14,500 funds are raising $3.2 trillion in capital (averaging $220 million per fund). Buyout deal value in 2023 – $438 billion. Buyout deal count in 2023 – 2,500. Buyout deal size in 2023 – $788 million (average). Top 5 buyout sectors by deal count in 2023 – Technology, Industrials, Services, Healthcare, Financial services. Median holding period for buyout-backed exits – 6.1 years in 2023 (2022: 5.9 years, 2021: 5.3 years). No. of Buyout funds closed in 2023 (Final Fund Closing) – 499 (2022: 722). Average size of Buyout funds closed in 2023 (Final Fund Closing) – $1.23 billion (2022: $673 million, $2021: $556 million). Average EBITDA purchase price multiple for LBO transactions – United States 10.8x, Europe 10.1x. Leveraged buyout (LBO) yield – US large corporate 10.9%, European institutional 8.9%. See below key findings & summary. View report here
“ Private Capital AUM at $14.5 Trillion, Dry Powder at $3.9 Trillion, 14,500 Funds Raising Average of $220 Million Per Fund Totalling $3.2 Trillion, Top 5 Largest Private Capital AUM are Buyout, Venture capital, Real estate, Growth & Infrastructure, Average Buyout Deal Value $788 Million, Top 5 Buyout Sectors by Deal Count Technology, Industrials, Services, Healthcare & Financial services, Buyout Median Holding Period 6.1 Years “
Bain & Co Chairman of Global Private Equity, Hugh MacArthur: “The year 2023 was one of portent. Deal value fell by 37%. Exit value slid even more, by 44%. Fund-raising dropped across private capital, as 38% fewer buyout funds closed. Interestingly, dollar commitments in buyouts surged as a number of high-performing funds came to market. But it was truly a year of haves and have-nots. Just 20 funds accounted for more than half of all buyout capital raised. The word for this market is stalled. Cutting through all of the macro noise was the 525-basis-point increase in US central bank rates from March 2022 to July 2023. The speed and magnitude of this rise caused general partners to hit the pause button. The good news? Interest rates appear to be stable and have been for a few months. Record dry powder is stacked and ready for deployment. A sizable chunk of this dry powder is aging and needs to be put to work. Looking into portfolios, nearly half of all global buyout companies have been held for at least four years. In short, the conditions appear to be shifting in favor of hitting the go button. We will see what 2024 brings.
Bain & Co Global Private Equity Report 2024
Bain & Co has released the Bain & Co Global Private Equity Report 2024, providing key insights into global private capital (Private equity, venture capital, direct lending, real estate) data & trends in 2023 & 2024.
Summary
- Global Private Capital AUM in 2023 – $14.5 trillion
- 2024 January fund raising – Around 14,500 funds, raising $3.2 trillion in capital ($220 million per fund)
- Top 5 Largest Private Capital AUM in 2023 – Buyout, Venture capital, Real estate, Growth, Infrastructure
- Top 5 Largest Private Capital AUM Growth 10-Year CAGR – Direct lending +25%, Venture capital +23%, Growth +19%, Infrastructure +18%, Secondaries +16%
- Top 5 Largest Private Capital raised by fund type in 2023 – Buyout, Real estate, Growth, Venture capital, Direct lending
- Top 5 Largest Decrease of private capital raised in 2023 vs 5-year average – Secondaries, Venture capital, Infrastructure, Real estate, Growth
- Top 5 Most Dry Powder by Fund Type in 2023 (un-deployed capital) – Buyout, Venture capital, Real estate, Growth, Infrastructure
- Global dry power in 2023 – $3.9 trillion
- Buyout funds dry powder in 2023 – $1.2 trillion (31% of global dry powder)
- Buyout deal value in 2023 – $438 billion
- Buyout deal count in 2023 – 2,500
- Buyout deal size in 2023 – $788 million (average)
- Top 5 buyout sectors by deal count in 2023 – Technology, Industrials, Services, Healthcare, Financial services
- Buyout-backed exit count in 2023 – 345
- Median holding period for buyout-backed exits – 6.1 years in 2023 (2022: 5.9 years, 2021: 5.3 years)
- Limited Partners investing into buyout funds by fund size (> $3 billion) vs 5-year average – Increased +37% (Increased +43% for larger than $5 billion fund size)
- Limited Partners investing into buyout funds by fund size ($500 million to $3 billion) vs 5-year average – Decreased -8%
- Limited Partners investing into buyout funds by fund size vs 5-year average – Decreased -15%
- No. of Buyout funds closed in 2023 (Final Fund Closing) – 499 (2022: 722)
- Average size of Buyout funds closed in 2023 (Final Fund Closing) – $1.23 billion (2022: $673 million, $2021: $556 million)
- Average EBITDA purchase price multiple for LBO transactions – United States 10.8x, Europe 10.1x
- Leveraged buyout (LBO) yield – US large corporate 10.9%, European institutional 8.9%
- US large corporate debt to EBITDA ratio for LBO loans – 5.9% (2022: 7.1%, 2021: 7%)
- Share of US middle-market LBO loan issuance by debt type – Direct lending 84%, Syndicated lending 16%
Bain & Co Global Private Equity Report 2024
1) Private Equity Insights 2024
Key insights:
- Global exit value and count declined significantly in 2023, the worst year for selling a buyout-backed company in a decade
- United States Federal Fund Rates increased 5.25% from March 2022 to July 2023
- General Partners (GPs) with $3.2 trillion in unsold assets
- Private equity General Partners (GPs) raised $1.2 trillion in 2023
- Buyout funds raised $448 billion in 2023
- Buyout funds with $1.2 trillion dry powder (un-deployed capital)
- Buyout funds – 26% ($312 billion) of $1.2 trillion dry powder are 4 years or older (adding pressure on GPs to invest)
Bain & Co Private Equity Insights:
- Liquidity
- Growth Strategy
- Secondaries
- Buy & Build – Organic Growth & Margin Improvement
- Generative AI
- Selling Assets – Capital & Returns to Investors
Private Equity Outlook 2024 – Liquidity:
- Rapidly rising interest rates led to sharp declines in dealmaking, exits, and fund-raising.
- Exit emerged as the most pressing problem, as LPs starved for distributions pull back new allocations from all but the largest, most reliable funds.
- Long-term outlook remains sound, but breaking the logjam will require more robust approaches to value creation and rapid innovation in liquidity solutions.
Private Equity Growth Strategy:
- With global exits at a 10-year low, it’s safe to say it has rarely been harder to sell a portfolio company.
- Sellers to think harder and earlier about how to demonstrate the value they’ve added during hold and what’s left on the table for a new owner.
- Time is now to refresh the value-creation plan (or develop a new one) and start showing early results to build credibility.
Secondaries:
- Given the industry’s liquidity crunch, secondary funds grew faster than any other asset class in 2023.
- These funds provide an array of tools GPs and LPs can use to manage their own liquidity needs as well as those of their stakeholders.
- Secondaries remain puny (small) relative to the rest of the industry, but there’s every reason to believe they will find a way to scale.
Buy & Build – Organic Growth & Margin Improvement:
- Buy-and-build continues to be one of private equity’s most popular strategies.
- But a sustained period of higher interest rates is making it a lot harder to drive returns, especially for platforms that were relying heavily on multiple arbitrage.
- Generating a strong exit in this environment will require doubling down on a strategy to produce organic growth and better margins – or finding one fast.
Generative AI:
- Generative AI is asserting itself as a game-changing technology across the global economy.
- The private investors taking full advantage are already using it to transform portfolio companies, sharpen due diligence, and make investment professionals smarter.
- They are also finding that focus is key: Targeting investment toward a few strategic or operational objectives is essential to producing measurable improvements at the bottom line.
Selling Assets – Capital & Returns to Investors:
- With exit channels in deep freeze, unsold assets are piling up in private equity portfolios, preventing distributions to investors and threatening future fund-raising.
- If rates ease in the coming year, exits should recover faster than they did in the wake of the global financial crisis.
- Even so, GPs need to prioritize getting capital back to LPs by developing comprehensive, pragmatic strategies to generate near-term exits.
2) Private Capital
Global Private Capital AUM (5-year history):
- 2019 – $7.4 trillion
- 2020 – $9.2 trillion
- 2021 – $11.5 trillion
- 2022 – $13.1 trillion
- 2023 – $14.5 trillion
Private Capital ~ Private equity, venture capital, direct lending, real estate, etc
Largest Private Capital AUM in 2023:
- Buyout
- Venture capital
- Real estate
- Growth
- Infrastructure
- Direct lending
- Secondaries
- Other
Fastest Private Capital AUM Growth 10-Year CAGR (Compound annual growth rate):
- Direct lending: +25%
- Venture capital: +23%
- Growth: +19%
- Infrastructure: +18%
- Secondaries: +16%
- Buyout: +12%
- Real estate: +10%
- Other: +10%
Largest Private Capital raised by fund type in 2023:
- Buyout
- Real estate
- Growth
- Venture capital
- Direct lending
- Secondaries
- Infrastructure
- Distressed private equity
Largest decrease of private capital raised in 2023 vs 5-year average:
- Secondaries: Decreased -92%
- Venture capital: Decreased -56%
- Infrastructure: Decreased -56%
- Real estate: Decreased -31%
- Growth: Decreased -30%
- Direct lending: Decreased -23%
- Buyout: Decreased -18%
- Distressed PE: Decreased -14%
- Other: Decreased -25%
Most Dry Powder by Fund Type in 2023:
- Buyout (31% of total dry powder)
- Venture capital
- Real estate
- Growth
- Infrastructure
- Direct lending
- Secondaries
- Distressed PE
- Other
Dry powder refers to un-deployed capital
Dry Powder & Fund Raising:
- Global dry power – $3.9 trillion
- Buyout funds dry powder – $1.2 trillion
- 2024 January – Around 14,500 funds raising $3.2 trillion in capital
3) Buyout Funds
2023 Global buyout:
- Deal value – $438 billion
- Deal count – 2,500
- Average deal size – $788 million
Top buyout sectors by deal count in 2023:
- Technology
- Industrials
- Services
- Healthcare
- Financial services
- Consumer products
- Retail
- Utilities & energy
- Media & entertainment
- Transportation
- Telecommunications
- Real estate
- Public sector
Buyout-backed exit count (5-year history):
- 2019 – 522
- 2020 – 490
- 2021 – 1,022
- 2022 – 613
- 2023 – 345
Global buyout deal count in 2023 (vs 5-year average):
- More than $5 billion value: Decreased -34%
- $1 billion to $5 billion value: Decreased -32%
- $100 million to $1 billion: Decreased -33%
- Less than $100 million value: Decreased -46%
- Total: Decreased -38%
Buyout-backed exit count by channel in 2023 vs 5-year average:
- IPO: Decreased -80%
- Sponsor to sponsor: Decreased -59%
- Sponsor to strategic – Decreased -32%
Median holding period for buyout-backed exits:
- 2019 – 5.4 years
- 2020 – 5.3 years
- 2021 – 5.3 years
- 2022 – 5.9 years
- 2023 – 6.1 years
Limited Partners investing into buyout funds by fund size vs 5-year average:
- More than $5 billion fund size: Increased +43%
- $3 billion to $5 billion: Increased +37%
- $500 million to $3 billion: Decreased -8%
- Below $500 million: Decreased -34%
- Total: Increased +15%
No. of Buyout funds closed in 2023 (Final Fund Closing):
- 2019 – 580
- 2020 – 672
- 2021 – 988
- 2022 – 722
- 2023 – 499
Average size of Buyout funds closed in 2023 (Final Fund Closing):
- 2019 – $800 million
- 2020 – $648 million
- 2021 – $556 million
- 2022 – $673 million
- 2023 – $1.23 billion
4) Leveraged buyout (LBO)
Average EBITDA purchase price multiple for LBO transactions:
- United States – 10.8x
- Europe – 10.1x
Leveraged buyout (LBO) yield:
- US large corporate – 10.9%
- European institutional – 8.9%
US large corporate debt to EBITDA ratio for LBO loans:
- 2019 – 6.7%
- 2020 – 6.9%
- 2021 – 7%
- 2022 – 7.1%
- 2023 – 5.9% (debt multiples decreased due to higher interest rate)
Share of US middle-market LBO loan issuance by debt type:
- Direct lending – 84% (2022: 80%)
- Syndicated lending – 16% (2022: 16%)
Bain & Company
Bain & Company is a global consultancy that helps the world’s most ambitious change makers define the future. Across 65 cities in 40 countries, we work alongside our clients as one team with a shared ambition to achieve extraordinary results, outperform the competition, and redefine industries. We complement our tailored, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster, and more enduring outcomes. Our 10-year commitment to invest more than $1 billion in pro bono services brings our talent, expertise, and insight to organizations tackling today’s urgent challenges in education, racial equity, social justice, economic development, and the environment.
Bain & Company’s Private Equity business
Bain & Company is the leading consulting partner to the private equity (PE) industry and its stakeholders. PE consulting at Bain has grown eightfold over the past 15 years and now represents about one-third of the firm’s global business. We maintain a global network of more than 2,000 experienced professionals serving PE clients. Our practice is more than triple the size of the next-largest consulting company serving PE firms.
Bain’s work with PE firms spans fund types, including buyout, infrastructure, real estate, and debt. We also work with hedge funds, as well as many of the most prominent institutional investors, including sovereign wealth funds, pension funds, endowments, and family investment offices. We support our clients across a broad range of objectives:
- Deal generation. We work alongside investors to develop the right investment thesis and enhance deal flow by profiling industries, screening targets, and devising a plan to approach targets.
- Due diligence. We help support better deal decisions by performing integrated due diligence, assessing revenue growth and cost-reduction opportunities to determine a target’s full potential, and providing a post-acquisition agenda.
- Immediate post-acquisition. After an acquisition, we support the pursuit of rapid returns by developing strategic blueprints for acquired companies, leading workshops that align management with strategic priorities, and directing focused initiatives.
- Ongoing value addition. During the ownership phase, we help increase the value of portfolio companies by supporting revenue enhancement and cost-reduction initiatives and refreshing their value-creation plans.
- Exit. We help ensure that investors maximize returns by preparing for exit, identifying the optimal exit strategy, preparing the selling documents, and prequalifying buyers.
- Firm strategy and operations. We help PE firms develop distinctive ways to achieve continued excellence by devising differentiated strategies, maximizing investment capabilities, developing sector specialization and intelligence, enhancing fund-raising, improving organizational design and decision making, and enlisting top talent.
- Institutional investor strategy. We help institutional investors develop best-in-class investment programs across asset classes, including private equity, infrastructure, and real estate. Topics we address cover asset class allocation, portfolio construction and manager selection, governance and risk management, and organizational design and decision making. We also help institutional investors expand their participation in private equity, including through coinvestment and direct investing opportunities.
Sign Up / Register
Caproasia Users
- Manage $20 million to $3 billion of assets
- Invest $3 million to $300 million
- Advise institutions, billionaires, UHNWs & HNWs
Caproasia Platforms | 11,000 Investors & Advisors
- Caproasia.com
- Caproasia Access
- Caproasia Events
- The Financial Centre | Find Services
- Membership
- Family Office Circle
- Professional Investor Circle
- Investor Relations Network
Monthly Roundtable & Networking
Family Office Programs
The 2024 Investment Day
- March 2024 - Hong Kong
- March 2024 - Singapore
- July 2024 - Hong Kong
- July 2024 - Singapore
- Sept 2024 - Hong Kong
- Sept 2024 - Singapore
- Oct 2024 - Hong Kong
- Nov 2024 - Singapore
- Visit: The Investment Day | Register: Click here
Caproasia Summits
- The Institutional Investor Summit
- The Investment / Alternatives Summit
- The Private Wealth Summit
- The Family Office Summit
- The CEO & Entrepreneur Summit
- The Capital Markets Summit
- The ESG / Sustainable Investment Summit
