Key Takeaways
- • Private equity funds captured a record 50.5% of private capital fundraising year-to-date, solidifying PE's dominance in the private markets landscape as reported in Barclays Private Bank's inaugural "Forging New Paths" report.
- • Global closed-end private capital funds held $14.7 trillion in assets under management as of 2022, with projections reaching $19.6 trillion by 2028, while the sector has raised nearly $2 trillion in fresh capital since early 2023.
- • Private wealth investors and family offices are increasingly allocating to private markets, following institutional investors' lead and recognizing opportunities across PE and venture capital channels for portfolio diversification.
- • PE fund vintages from 2011 to 2022 outperformed the S&P 500, while venture capital funds demonstrated stronger 15-year returns at 11.8% IRR despite higher volatility, underscoring the importance of manager selection in both asset classes.
Summary
According to Barclays Private Bank's new report, private equity continues to dominate the private markets sector while attracting expanding participation from private wealth investors and family offices. The report, titled "Forging New Paths: How private investors are capitalising on the evolution of private markets," documents PE's commanding 50.5% share of private capital fundraising year-to-date—a record high despite persistent macroeconomic headwinds.
The scale of the private markets opportunity remains substantial. Global closed-end private capital funds managed $14.7 trillion in assets as of 2022, a figure anticipated to grow to $19.6 trillion by 2028. Since the start of 2023, these funds have collectively deployed nearly $2 trillion in new capital, signaling robust investor appetite and capital availability across the sector.
The evolution of private markets is characterized by democratization beyond traditional institutional investors. Private wealth investors are increasingly recognizing opportunities within private equity and venture capital fund structures, following the established participation patterns of pension funds, endowments, and other institutional capital allocators. This shift reflects a broader recognition among high-net-worth individuals and family offices that diversified exposure to private markets can enhance portfolio construction.
Historical performance metrics underscore the appeal of private markets to sophisticated investors. PE fund vintages spanning 2011 to 2022 delivered returns exceeding those of the S&P 500 over comparable periods. Venture capital funds, while exhibiting greater volatility than their PE counterparts, have generated a 15-year internal rate of return of 11.8%. However, the Barclays report emphasizes that manager selection remains critical—fund performance varies materially depending on GP quality, strategy focus, and operational execution.
The scale of the private markets opportunity remains substantial. Global closed-end private capital funds managed $14.7 trillion in assets as of 2022, a figure anticipated to grow to $19.6 trillion by 2028. Since the start of 2023, these funds have collectively deployed nearly $2 trillion in new capital, signaling robust investor appetite and capital availability across the sector.
The evolution of private markets is characterized by democratization beyond traditional institutional investors. Private wealth investors are increasingly recognizing opportunities within private equity and venture capital fund structures, following the established participation patterns of pension funds, endowments, and other institutional capital allocators. This shift reflects a broader recognition among high-net-worth individuals and family offices that diversified exposure to private markets can enhance portfolio construction.
Historical performance metrics underscore the appeal of private markets to sophisticated investors. PE fund vintages spanning 2011 to 2022 delivered returns exceeding those of the S&P 500 over comparable periods. Venture capital funds, while exhibiting greater volatility than their PE counterparts, have generated a 15-year internal rate of return of 11.8%. However, the Barclays report emphasizes that manager selection remains critical—fund performance varies materially depending on GP quality, strategy focus, and operational execution.
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