Private capital fundraising plays has an outsized role in the investment world. In 2021, the amount raised in the private market sphere reached $1.4 trillion, the highest on record. Through the first three quarters of 2022, that high point figure likely won’t be reached, with fundraising currently sitting at $926 billion. Times are still good – just not as good.
In looking at the fund counts, the fund count is down significantly so far through 2022 at just 1,847. This is well behind the 4,421 of 2021. Unless the number of funds jumps significantly in the final quarter of 2022, we may see the fund count at levels last seen in 2012 or 2013.
Source: Pitchbook
Comparing Private Funding with Other Fundraising Categories
How has private marketing funding done compared to other strategies? Well, it depends on your measure. In terms of absolute dollars, private capital is far above the rest at $1.4 trillion. The next closest is private equity at $484 billion, venture capital at $301 billion, real estate at $114 billion, real assets at $147 billion, debt at $214 billion, fund of funds at $31 billion, and secondaries at $59 billion.
In terms of year-over-year change in capital raised, the best performing has been real assets at +22.6%. On the other end, the weakest has been fund of funds at -27.9%.
Source: Pitchbook
Share of Private Capital Raised
Shifting attention to the share of capital raised by size, the following has that view. Overall, the larger firms (firms with more than $5 billion) continued to gain market share compared for the third straight year. Smaller firms (firms with less than $1 billion) represent a small fraction of the overall capital raised – through the third quarter of 2022, around 25%.
Source: Pitchbook
Another way to view the share of capital raised is by region – shown below. Overall, the top area for fundraising was North America at around 75% of all fundraising. Far behind in second place is Europe at around 10% of the pie, followed by Asia at a little less than 10%. The Oceania, Middle East, Africa, and the rest of the world account for less than 5% of capital raised.
Source: Pitchbook
Summing Up
Overall, the state of the private market funding world looks to be fairly healthy heading into the end of 2022. The 2023 outlook may be a little weaker as the global economy continues to look for a soft landing from higher interest rates and declining inflation.
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