Venture capital
Real estate
Hedge funds
Private debt
Private equity
Private equity
Venture capital
Private debt
Infrastructure
Hedge funds
Consistently strong returns, which enjoyed an abnormally large boost in 2021 and have beaten both the S&P 500 TR Index and MSCI World TR Index over the longer term, are just one factor behind the continued growth of private equity. Preqin forecasts that AUM will exceed $11.12tn by 2026, up from an estimated $5.3tn at the end of 2021. This represents a 15.9% CAGR between 2021 and 2026, which is slightly faster than the growth rate between 2015 to 2020 and well above the long-term trend.
Infrastructure
Real estate
Venture capital had a record year in 2021, with total capital invested by fund managers reaching $476bn, and performance breaking records. Exits also soared to $410bn. A growing asset class, venture capital has proven to be a vital component of institutional investor portfolios, with an attractive risk/return profile and high upside – as evidenced by short-term returns in particular.
The share of capital raised by the 50 largest funds continued to climb in 2021, diminishing the proportion secured by funds outside of the top group. While this is where we see the decline in number of funds closed,
a surprising trend has emerged when looking at the share of capital secured by the 10 largest funds. This new analysis of capital concentration may belie LPs' willingness to work with certain types of funds over others, and their evolving relationships with, and trust in, mega funds.
Growth Rate
$bn
Global real estate assets under management ($bn and growth rate), 2010-2027F
Global infrastructure assets under management ($bn and growth rate), 2010-2027F
Global private debt assets under management ($bn) and growth rate, 2010–2028F
Annualized historical and forecast AUM growth, 2016–2028F
Global venture capital assets under management ($bn) and growth rate, 2010–2028F
Global private equity assets under management ($bn) and growth rate, 2010–2028F
2028F
2022
2016
1,969.0
4,825.9
10,000.0
8,000.0
6,000.0
4,000.0
2,000.0
0
2010–2016: 5.33%
Year
Growth Rate
2016–2022: 16.12%
2022–2028F:
Global real estate assets under management ($bn) and growth rate, 2010–2028F
2028F
2022
2016
739.6
1,569.3
2010–2016: 9.83%
2016–2022: 13.36%
2,500.0
2,000.0
1,500.0
1,000.0
500.0
0
Annualized historical and forecast AUM growth, 2016–2028F
Global venture capital assets under management ($bn) and growth rate, 2010–2028F
2028F
2022
2016
484.6
1,708.5
2010–2016: 8.76%
2016–2022: 23.37%
5,000.0
4,000.0
3,000.0
2,000.0
1,000.0
0
Global private debt assets under management ($bn) and growth rate, 2010–2028F
2028F
2022
2016
560.8
1,472.7
2010–2016: 10.34%
2016–2022: 17.46%
3,000.0
2,500.0
2,000.0
1,500.0
1,000.0
0
Global infrastructure assets under management ($bn) and growth rate, 2010–2028F
2028F
2022
2016
357.0
1,087.6
2010–2016: 14.19%
2016–2022: 20.40%
2,500.0
2,000.0
1,500.0
1,000.0
500.0
0
Year
Year
Year
Year
$bn
Growth Rate
$bn
Story: Private equity AUM will grow at a slower pace globally, but North America is expected to grow its share of the global private equity market by 2028. This is despite a challenging fundraising environment that we continue to expect throughout the forecast period.
Story: Private debt AUM will grow at a compound annual growth rate of to 2028 almost doubling the 2022 AUM figure of . We forecast that direct lending will be the strategy with the strongest AUM growth – reaching in 2028.
Story: The annualised AUM growth rate for private real estate up to 2028 is now expected to be in the single digits as investments are predicted to be hampered by interest rate concerns, dwindling office demand, and pricing discrepancies.
Story: Global infrastructure AUM has been revised
to by 2028. The AUM of Europe-focused funds is still expected to overtake that of North America-focused funds but this is now expected to happen one year later in 2026.
Story: Early-stage VC AUM is expected to be the fasting growing sub-strategy for 2022 to 2028F
at but growth will not be uniform for all regions. Late-stage VC for Europe and APAC are forecast to be laggards in terms of AUM growth in contrast to North America.
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Story: Despite slowing AUM growth, hedge funds will remain the second largest alternative asset class but the forecast annual growth rate through 2028 is by far the lowest of any asset class over the same period and below the total alternatives growth rate of .
2022–2028F:
2022–2028F:
2021–2028F:
2022–2028F:
AUM
Year
2028F
2022
2016
2022-2028F:
AUM
25.0%
20.0%
15.0%
10.0%
5.0%
0
3,000.0
2,500.0
2,000.0
1,500.0
1,000.0
0
Year
560.8
1472.7
2010-2016: 10.34%
2016-2022: 17.46%
Story: With further interest rate hikes widely expected, we expect that private debt will attract more attention from traditional fixed income investors. Preqin forecasts private debt AUM will grow at a CAGR of between 2021-2027 to reach an all-time high of in 2027. Private debt is maturing as an asset class, and we see that in a slight easing in the pace of AUM growth.
2010-2016: 9.83%
2016-2022: 13.36%
2028F
2022
2016
2022-2028F:
739.6
1,569.3
AUM
15.0%
12.5%
10.0%
7.5%
5.0%
0
2,500.0
2,000.0
1,500.0
1,000.0
500.0
0
Year
Story: While some asset classes look set to experience a significant deceleration in their AUM growth, real estate could be relatively well protected. Assets under management (AUM) hit $1.32tn at the end of 2021 and is expected to increase by a CAGR of between the end of 2021 and the end of 2027, to reach .
2010-2016: 14.19%
2016-2022: 20.40%
2028F
2022
2016
2022-2028F:
357.0
1,087.6
AUM
25.0%
20.0%
15.0%
10.0%
5.0%
0
2,500.0
2,000.0
1,500.0
1,000.0
500.0
0
Year
Story: Following a stellar fundraising year in 2021, global infrastructure is set to see it’s AUM gain ground on that of real estate towards 2027, climbing from to of the larger real asset classes’ AUM over the 6 years. In Europe, the need for the region to gain energy independence from Russia in light of the Ukraine war is central to a long-term shift towards more intensive investment in renewable energy. In the US, the recent signing of the Inflation Reduction Act alongside the earlier Infrastructure Investment and Jobs Act by the Biden administration provides a strong tailwind for unlisted infrastructure in North America.
Growth Rate
$bn
Growth Rate
$bn
Growth Rate
$bn
Growth Rate
$bn
AUM
AUM
AUM
AUM
Read the report
Read the report
Read the report
Read the report
Read the report
Only available in the report
Growth Rate
$bn
Growth Rate
$bn
Growth Rate
$bn
Growth Rate
$bn
Only available in the report
Only available in the report
Only available in the report
Only available in the report
Only available in the report
Only available in the report
Only available in the report
Only available in the report
Only available in the report
2010-2016: 8.76%
2028F
2022
2016
2016-2022: 23.37%
2022-2028F:
484.6
1,708.5
AUM
25.0%
20.0%
15.0%
10.0%
5.0%
0
5,000.0
4,000.0
3,000.0
2,000.0
1,000.0
0
Year
growth
25.0%
20.0%
15.0%
10.0%
5.0%
0
25.0%
20.0%
15.0%
10.0%
5.0%
0
25.0%
20.0%
15.0%
10.0%
5.0%
0
15.0%
12.5%
10.0%
7.5%
5.0%
0
growth
growth
growth
growth
growth
growth
growth
growth
growth
25.0%
20.0%
15.0%
10.0%
5.0%
0
2028F
2022
2016
3,249.6
4,180.7
2010–2016: 16.10%
2016–2022: 4.03%
2022–2028F:
5,000.0
4,000.0
3,000.0
2,000.0
1,000.0
0
growth
Year
AUM
25.0%
20.0%
15.0%
10.0%
5.0%
0
Growth Rate
Only available in the report
$bn
25.0%
20.0%
15.0%
10.0%
5.0%
0
Growth Rate
$bn
Only available in the report
2028F
2022
2016
3,249.6
4,180.7
2010–2016: 16.10%
2016–2022: 4.03%
2022–2028F:
AUM
growth
25.0%
20.0%
15.0%
10.0%
5.0%
0
10,000.0
8,000.0
6,000.0
4,000.0
2,000.0
0
Year