Private Equity - Caribbean | Statista Market Forecast

The deal value in the Private Equity market is projected to reach US$28.11m in 2024.
It is expected to show an annual growth rate (CAGR 2024-2025) of 9.53% resulting in a projected total amount of US$30.79m by 2025.
The average size per deal in the Private Equity market amounts to US$1.87m in 2024.
From a global comparison perspective it is shown that the highest deal value is reached United States (US$594.00bn in 2024).
In the Private Equity market, the number of deals is expected to amount to 19.85 by 2025.

Definition:

Private equity involves partnerships that buy, manage, and eventually sell companies. These firms manage funds for institutional and accredited investors, who commit significant capital for extended periods. Private equity funds can acquire entire private or public companies or participate in buyouts with other investors, but they typically avoid holding stakes in publicly traded companies. The Private Equity market encompasses a broad range of deal types that involve acquiring equity ownership in private companies. This market typically includes leveraged buyouts (LBOs), growth capital, Carve-outs, and other forms of equity investments that target mature businesses with the potential for operational improvements and value creation. The market presented here does not include Venture Capital investments. While both Private Equity and Venture Capital involve equity stakes in companies, Venture Capital specifically focuses on high-growth potential startups, while private equity firms invest in established companies with the aim of increasing the value of these companies before selling their investment after several years.

Additional information:

The market contains the following KPIs: the deal value, the number of deals, the average deal size as well as the assets under management (AUM). Key players in this market are companies such as Blackstone, The Carlyle Group, KKR, Goldman Sachs, General Atlantic, and Warburg Pincus.

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Leveraged Buyouts (LBOs)
Growth Capital
Carve-Outs
Distressed Buyouts
Secondary Buyouts

Venture Capital
Venture Debt
Traditional bank loans
Digital capital raising

The Private Equity market in the Caribbean is witnessing a subdued decline, influenced by factors such as economic uncertainties, limited access to capital, and regional political instability, which are hindering investor confidence and overall growth potential in the sector.

Customer preferences: Investors in the Caribbean Private Equity market are noting a shift towards sustainable and socially responsible investment opportunities, reflecting a growing consumer preference for ethically aligned businesses. As environmental consciousness rises, firms focusing on green technologies and renewable resources are gaining traction. Additionally, the demographic shift towards a younger, tech-savvy population is fostering interest in innovative startups, particularly in the digital and fintech sectors, as these resonate with evolving lifestyle choices and increased accessibility to technology.

Trends in the market: In the Caribbean, the Private Equity market is experiencing a notable trend towards impact investing, where funds are increasingly directed towards ventures that prioritize social and environmental outcomes alongside financial returns. Additionally, there is a surge in interest for technology-driven businesses, particularly in e-commerce and mobile payment solutions, driven by increased internet penetration and the demand for digital transformation. These trends signify a shift in investment strategies that not only seek profitability but also aim to foster sustainable economic growth, challenging traditional investment models and creating new opportunities for industry stakeholders.

Local special circumstances: In the Caribbean, the Private Equity market is shaped by unique geographical and cultural factors that influence investment strategies. The region's diverse economies, reliant on tourism and agriculture, create opportunities for funds focused on sustainable ventures that enhance local communities. Furthermore, regulatory frameworks vary significantly across islands, impacting the ease of doing business and attracting foreign investment. Cultural emphasis on community and resilience promotes impact-driven investments, aligning financial goals with social progress and fostering innovative solutions tailored to local needs.

Underlying macroeconomic factors: The Private Equity market in the Caribbean is significantly influenced by macroeconomic factors, particularly central bank policies and interest rates. Lower interest rates facilitate borrowing, enabling funds to raise capital more easily and invest in local businesses. Conversely, higher rates can increase the cost of capital, dampening investment activity. Additionally, global economic trends, such as shifts in commodity prices and tourism flows, directly impact the region's economic health, influencing private equity returns. Fiscal policies that prioritize infrastructure development and economic diversification further enhance the attractiveness of the Caribbean for private equity investment, fostering innovation and sustainable growth.

Data coverage:

The figures are based on deal value, number of deals, the average size of each deal, and assets under management within the Private Equity market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, and publicly available databases. In addition, we use relevant key market indicators and data from country-specific associations, such as: GDP, total investment (% of GDP), household wealth (per Adult), high income (% of population), and number of high-net-worth individuals (HNWI). This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are total investment (% of GDP), household wealth (per Adult), number of high-income persons, and number of high-net-worth individuals (HNWI).

Additional notes:

The market is updated twice a year in case market dynamics change.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

In the last decades, private equity has emerged as a dominant force in global finance, reshaping industries and driving economic growth worldwide. After the peak experienced in 2021, however, private equity activity slowed down in 2022 and 2023, due to multiple factors such as inflationary headwinds, rising interest rates, geopolitical unrest and general uncertainty. With an estimated value of nearly four trillion dollars, private equity dry capital - a term commonly used in the private equity world to refer to committed, but unallocated capital - reached unprecedented heights in 2023. A high level of this capital means that private equity firms have unspent cash reserves. Among the most influential private equity firms worldwide, the Blackstone Group is the largest in terms of funds raised.