In the last decades, private equity has emerged as a dominant force in global finance, reshaping industries and driving economic growth worldwide. After the peak experienced in 2021, however,
, due to multiple factors such as inflationary headwinds, rising interest rates, geopolitical unrest and general uncertainty. With an estimated value of nearly four trillion dollars, private equity dry capital - a term commonly used in the private equity world to refer to committed, but unallocated capital -
. A high level of this capital means that private equity firms have unspent cash reserves. Among the most influential private equity firms worldwide, the Blackstone Group is
.
Why does North America attract the most private equity funding globally?
North America is the clear favorite for private equity firms globally in terms of the
volume of private equity funds focused on the region. This is due to several factors. One being that the United States is home to eight of the
largest ten private equity firms worldwide. Another is the strong concentration of
privately owned startups with high market valuations. Highly valued companies typically demonstrate high growth potential, which is a key factor that private equity firms look at when deciding to make an investment.
What is the outlook for private equity?
The COVID-19 pandemic and recent geopolitical tensions brought a lot of instability in the global market in recent years, and the near future does not seem brighter. Recent surveys indicate that investors felt particularly
concerned about the impact of inflation, anti-globalist policies, and global supply chain disruption on private equity markets worldwide. New challenges and risks call for a renewed investment strategy for PE investors. Among the
preferred strategies to navigate risk, PE investors indicated investing in managers with multiple growth strategies and investing in longer-term funds as their top priority. Regardless of risk and strategy,
environmental, social, and governance (ESG) considerations have a growing influence on investors' decisions, and have become a determining factor for more than one in two investors worldwide.
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