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Laxman Pai, Opalesque Asia: Global private asset fundraising has slowed to its weakest pace in nearly a decade, retreating to levels last seen in 2017, according to a new report from McKinsey & Co.
After reaching a record of almost $1.7 trillion in 2021, capital raised across private markets declined to approximately $1.1 trillion in 2024, the consultancy stated. The downturn has been most pronounced in private equity and real estate, where subdued exits have weighed heavily on managers' ability to return cash to investors.
By contrast, private credit and infrastructure have held up relatively well. Demand for refinancing and asset-backed lending has buoyed credit strategies. At the same time, infrastructure continues to attract investors with inflation-linked yields and exposure to digital-era assets such as data centers.
"Private markets are going through a digestion phase," McKinsey wrote, estimating it could take up to three years for the industry to work through the overhang of unsold portfolio companies and resume more normal fundraising cycles.
Some bright spots remain. Fundraising through private wealth channels and secondaries markets has accelerated, offsetting part of the shortfall. In the U.S., evergreen and semi-liquid structures geared toward high-net-worth investors grew to $348 billion in assets under management (AUM) last year, pulling in $64 billion in fresh capital. Globally, secondary funds raised about $130 billion in 2024, lifting asse...................... To view our full article Click here
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