Defined Benefit
Insurance Assets
Nonprofit

Private Equity Decelerated in 2022, with the Outlook for 2023 Very Unclear

Private Equity Decelerated in 2022, with the Outlook for 2023 Very Unclear
clock
1 min 45 sec

Private equity showed a gradual decline in 2022, but fundraising and company investment and exit activity remain comparable to the pre-pandemic levels seen in 2018 and 2019.

Fundraising: In 2022 private equity partnerships holding final closes raised $870 billion across 2,211 partnerships (unless otherwise noted, all data is from PitchBook and 4Q numbers are very preliminary). The dollar amount is 16% lower than 2021, but partnerships plunged by 47%. 4Q had final closes totaling $166 billion, down 21% from 3Q. The number of funds totaled 407, down 20%.

private equity

Buyouts: New buyout investments for 2022 totaled 12,985, down 14% from 2021. Dollar volume fell 9% to $837 billion. 4Q saw 2,625 new investments, a 20% decrease from 3Q, but dollar volume rose 27% to $239 billion.

VC Investments: The year produced 51,020 rounds of new investment in venture capital (VC) companies, down 16% from 2021. Announced volume of $509 billion was down 31%. 4Q saw 9,280 new rounds, a 20% decline from 3Q, and dollar volume fell 21% to just $81 billion.

Exits: Last year saw 2,901 buyout-backed private M&A exits, down 23% from 2021, with proceeds of $590 billion, down 26%. 4Q had 551 private exits, down 22% from 3Q, with proceeds of $132 billion, down 2%. The year’s 201 buyout-backed IPOs dropped 55% from 2021, with proceeds of $33 billion, down 75%. 4Q IPOs numbered 50, down 21% from 3Q, and proceeds of $8 billion declined 27%. Venture-backed M&A exits for the year totaled 2,625, down 24% from 2021. Announced dollar volume of $110 billion fell 57%. The final quarter had 462 exits, down 20% from 3Q, and value of only $7 billion, plunging 72%. The year’s 317 venture-backed IPOs sank 51% from 2021, with proceeds of $41 billion, falling 75%. There were 106 in 4Q, up 33% from 3Q, but the $8 billion of proceeds fell 47%.

3Q22 Net IRRs by Strategy

Returns: In 3Q, and in the two prior quarters, private equity fell by only about 35% of the public equity market’s decline. With the upcoming 4Q valuations being subject to annual audits, continued moderate declines are likely.

Disclosures

The Callan Institute (the “Institute”) is, and will be, the sole owner and copyright holder of all material prepared or developed by the Institute. No party has the right to reproduce, revise, resell, disseminate externally, disseminate to any affiliate firms, or post on internal websites any part of any material prepared or developed by the Institute, without the Institute’s permission. Institute clients only have the right to utilize such material internally in their business.

Posted by

Share
Share on linkedin
Share on facebook
Related Posts
Private Markets

Secondary Investments: Key Issues for Institutional Investors

Aidan Davison
A primer on private equity secondary investments for institutional investors.
Operations

Digital Assets in Institutional Portfolios: Where Are We Now?

Ashley Kahn
A new look at digital assets and their potential role in institutional investor portfolios.
Private Markets

How Lenders See NAV Loans and What Private Credit Investors Need to Know

Sarie Diloné
How NAV loan lenders view net asset value financings.
Private Markets

Risks of NAV Loans: What Limited Partners Should Consider

David Wong
A guide for limited partners on the risks of NAV loans.
Private Markets

What Institutional Investors Should Know About NAV Loans

Sarie Diloné
A guide to net asset value (NAV) loans.
Private Markets

Private Equity Fundraising Rebounds but Activity Struggles

Ashley Kahn
An analysis of the latest private equity activity.
Private Markets

Fewer Funds Raised in Private Equity, but More Dollars Flow Into Them

Ashley Kahn
Callan expert analyzes private equity activity in 3Q24.
Private Markets

2024 Private Equity Fees and Terms Study: Lessons for Institutional Investors

Ashley Kahn
This study analyzes private equity fees and terms to help institutional investors.
Private Markets

Nonprofits: Same Mission, but New Approach to Allocations

Tony Lissuzzo
Callan expert discusses changes in nonprofit allocation trends over the last 20 years.
Private Markets

Some Early Signs of a Rebound, but Challenges Remain

Ashley Kahn
Callan expert analyzes private equity activity in 2Q24, from fundraising to exits.

Callan Family Office

You are now leaving Callan LLC’s website and going to Callan Family Office’s website. Callan Family Office is not affiliated with Callan LLC.  Callan LLC has licensed the Callan® trademark to Callan Family Office for use in providing investment advisory services to ultra-high net worth clients, family foundations, and endowments. Callan Family Office and Callan LLC are independent, unaffiliated investment advisory firms separately registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940.

Callan LLC is not responsible for the services and content on Callan Family Office’s website. Inclusion of this link does not constitute or imply an endorsement, sponsorship, or recommendation by Callan LLC of their website, or its contents, and Callan LLC is not responsible or liable for your use of it. When visiting their website, you are subject to Callan Family Office’s terms of use and privacy policies.