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When Private Equity International published its first issue in December 2001, $1 billion-plus private equity funds were few and far between, and fundraising “was very much a physical sport”, per Niklas Amundsson, a partner at placement firm Monument Group, with physical data rooms for due diligence and frequent travel for in-person meetings. Meanwhile, secondaries market transaction volume was in the single-billion dollars; the term ‘ESG’ had not yet been coined; and the industry was largely overlooked by regulators.
Much has changed over the past two decades. The 10 largest funds closed in H1 2022 raised $133 billion between them, per PEI data, and virtual data rooms and online meetings are now commonplace, particularly post-covid. At the same time, the secondaries market has grown significantly, with advisers estimating that secondaries transaction volume grew to around $130 billion in 2021.
When it comes to environmental, social and governance considerations, LPs are paying increasing attention to GPs’ approaches, reporting and performance, including their actions around DE&I. The private equity industry has also been subject to market-changing reforms over the past 21 years, such as the Alternative Investment Fund Managers Directive and the Dodd-Frank Act following the global financial crisis, and more recently ESG-focused legislation such as the EU’s Sustainable Finance Disclosure Regulation.
Perhaps most notable of all, however, is the substantial rise in LP appetite for the asset class – according to PEI’s Global Investor 100 ranking, the world’s 100 largest private equity investors allocated $1.79 trillion to PE in 2021.
These developments are explored in this interactive presentation, which highlights the key takeaways from PEI’s 21st Anniversary special report.