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Laxman Pai, Opalesque Asia:

Global private equity funds raised $405bn, by the end of Q3 2022, tracking 41.8% below the 2021 full-year total of $695.6bn, said Preqin Global Report 2023: Private Equity.

During this period, total deal flow globally for private equity-backed deals is tracking below 2021 by 44.3% in aggregate deal value.

Overall, Preqin forecasts global private equity fundraising to fall by 2.7% in 2023, following an expected 21.5% decline in 2022. This comes as more investors grapple with the denominator effect, a result of public equity and bond valuations taking a hit.

Internationally, North America-focused fundraising held up relatively well, at 31.3% below the previous full year's level. In comparison, APAC recorded the steepest drop in fundraising when measured by both the number of funds closed and the aggregate capital raised, driven by notable risk aversion towards China-focused funds.

"A pivot to raising capital from non-institutional investors is underway. The emphasis is shifting toward raising capital non-institutional capital, including family offices and high-net-worth individuals. In 2022, investors have been balancing the prospect of weaker returns from risk assets caused by higher interest rates and declining valuation multiples, as well as weaker exit environment, compared to 2021," said the report.

These factors will limit investors' near-term appetite for new allocations to private equity. As more institutional inv......................

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