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Laxman Pai, Opalesque Asia:

Global venture capital assets under management (AUM) reached $2.45tn in March 2022, up from $2.23tn in December 2021, according to Preqin data.

Over the next five years, Preqin predicts a slowdown in global venture capital performance and fundraising relative to the past few years. That said, the asset class is still expected to see significant growth in total AUM, compared to other asset classes within alternatives.

A strong market for venture capital fundraising has helped boost AUM growth across the asset class. Aggregate capital raised increased from $102.8bn in 2015 to reach $221.4bn at the end of 2021. By the end of Q3 2022, venture capital funds raised $162.5bn - equal to 73% of the full-year total in 2021.

"Entry valuations have reduced significantly and competition for deals has softened. Aggregate deal values ($346.3bn) across the asset class in the period to the end of Q3 2022 are just 51% of those completed in 2021 (685.1bn), as more managers hold off on capital deployment. At the end of Q3 2022, venture capital managers had $530.8bn of dry powder to deploy into the market, an increase of 40.7% compared to December 2021," said the report.

Dry powder is forecasted to increase to $659.1bn by the end of 2027.

Allocators have more choices than ever when it comes to investing in the space. Preqin data shows that there are currently 5,048 venture capital funds in the market globally, targeting $400.0bn in the capital,......................

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