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Laxman Pai, Opalesque Asia: Venture capital (VC) is forecast to be the fastest growing private capital asset class in the next few years (+19.1% growth per year, from $1.46tn end-2021 to $4.17tn by 2027), followed by infrastructure (+13.3%), and private debt (+10.8%), said a study.
According to Preqin's Future of Alternatives 2027 report, North America will be the main driver for VC funding - annual fundraising in the region is expected to grow from $118bn at the end of 2021 to $223bn by the end of 2027.
Fundraising in Europe is also expected to grow to $30.5bn by the end of 2027, up from $21.3bn at the end of 2021, it said.
"Strong annual performance is expected to be one of the drivers of AUM growth across VC markets, with the asset class expected to return +14.6% annually from 2021-2027. This comes despite headwinds from a deteriorating macro environment, which is expected to hit current valuations, reduce the number and value of exits, and increase the cost of capital," Preqin said.
Meanwhile, Hedge funds are bottom of the AUM growth table, with 3.45% annual growth forecasted from H1 2022 to 2027. This year has been challenging for the hedge fund industry resulting in a forecasted decline in AUM in the short run, but a recovery is expected over the next few years.
Despite a challenging macroeconomic outlook, demand for private capital continues to show resilience, with total global assets under management (AUM) expected to almost double ...................... To view our full article Click here
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