Private Equity - Chile | Statista Market Forecast

The deal value in the Private Equity market is projected to reach US$603.60m in 2024.
It is expected to show an annual growth rate (CAGR 2024-2025) of 6.51% resulting in a projected total amount of US$642.90m by 2025.
The average size per deal in the Private Equity market amounts to US$120.70m 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 4.74 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 Chile has seen minimal decline, influenced by factors like cautious investor sentiment, economic uncertainties, and shifting regulatory frameworks that impact capital flow and investment strategies in the region's evolving landscape.

Customer preferences: In Chile, the Private Equity market is witnessing a notable trend towards sustainable and impact investing, as consumers increasingly prioritize social and environmental responsibility in their investment choices. This shift is largely driven by a younger demographic that values transparency and ethical practices, leading to growing interest in funds that support renewable energy, social equity, and community development. Additionally, there's an emphasis on technology-driven solutions, reflecting the evolving lifestyles and digital preferences of consumers seeking innovative approaches to investment opportunities.

Trends in the market: In Chile, the Private Equity market is experiencing a surge in interest towards sustainable and impact investing, with a marked focus on funds aimed at renewable energy, social equity, and community development initiatives. This growing trend is bolstered by a younger, socially conscious investor base that demands transparency and accountability from fund managers. Furthermore, the integration of technology into investment strategies is on the rise, as stakeholders increasingly leverage digital platforms to enhance accessibility and streamline investment processes. The significance of these trends lies in their potential to reshape the investment landscape, fostering eco-conscious growth while aligning financial returns with societal benefits, thus attracting diverse investors and partnerships.

Local special circumstances: In Chile, the Private Equity market is uniquely influenced by its diverse geography and strong cultural emphasis on environmental stewardship. The country’s vast natural resources, particularly in renewable energy like solar and wind, attract funds focused on sustainable investments. Additionally, cultural values prioritize social equity, fostering support for initiatives that address local community needs. Regulatory frameworks also encourage transparency and responsible investing, enhancing investor confidence. These local factors not only differentiate Chile from other markets but also position it as a leader in sustainable finance within Latin America.

Underlying macroeconomic factors: The Private Equity market in Chile is significantly influenced by macroeconomic factors, especially central bank policies and interest rate dynamics. As the Central Bank of Chile adjusts interest rates to manage inflation and stimulate economic growth, the cost of capital for private equity firms fluctuates, impacting their investment strategies and valuations. Lower interest rates typically encourage more aggressive investment in growth-oriented sectors like renewable energy, enhancing capital availability and encouraging partnerships with local enterprises. Conversely, rising rates can lead to tighter liquidity conditions, making it more challenging for firms to secure funding and execute deals. Additionally, the broader economic landscape, including GDP growth rates and commodity prices, plays a crucial role in shaping investor sentiment and market performance.

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.