Private Equity - Colombia | Statista Market Forecast

The deal value in the Private Equity market is projected to reach US$401.30m 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$427.40m by 2025.
The average size per deal in the Private Equity market amounts to US$66.89m 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 5.46 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 Colombia is witnessing minimal decline, influenced by factors such as economic volatility, evolving regulatory environments, and the need for businesses to adapt. Despite challenges, investment interest remains steady, highlighting resilience in these uncertain times.

Customer preferences: The Private Equity market in Colombia is adapting to notable shifts in consumer preferences, particularly towards sustainable and socially responsible investments. There is a growing demand for companies that prioritize environmental, social, and governance (ESG) factors, reflecting the cultural shift towards sustainability among younger demographics. Additionally, the rise of e-commerce and digital services is influencing investment strategies, as firms increasingly seek to fund innovative startups that cater to the evolving lifestyle of tech-savvy consumers.

Trends in the market: In Colombia, the Private Equity market is experiencing a significant rise in investments focused on sustainable and responsible ventures, driven by a shift in consumer preferences towards environmental, social, and governance (ESG) criteria. This trend is particularly notable among younger investors who prioritize sustainability in their decision-making. Additionally, the increasing prevalence of e-commerce and digital services is reshaping investment strategies, pushing firms to seek out innovative startups that cater to the needs of a tech-savvy population. This evolution not only enhances market opportunities but also compels traditional companies to adapt, ultimately fostering a more resilient and socially responsible economic landscape.

Local special circumstances: In Colombia, the Private Equity market is uniquely influenced by its diverse cultural landscape and geographical attributes, including a burgeoning urban population and rich natural resources. The country's commitment to peace and economic development post-conflict has increased investor confidence, while local entrepreneurial spirit drives innovation in sectors like renewable energy and tech. Regulations promoting foreign investments further enhance growth, allowing firms to tap into Colombia's strategic position in Latin America, which helps attract global capital flows focused on sustainable projects and responsible business practices.

Underlying macroeconomic factors: The Private Equity market in Colombia is significantly shaped by macroeconomic factors such as interest rates, inflation, and overall economic stability. Central bank policies, particularly regarding interest rates, play a crucial role in determining the cost of capital for private equity firms. Lower interest rates can facilitate increased borrowing and investment, enticing more capital into the market. Conversely, rising rates may constrain investment opportunities and alter risk assessments. Furthermore, Colombia's economic health, influenced by commodity prices and international trade dynamics, also impacts investor confidence and capital flows, while fiscal policies aimed at infrastructure and innovation further enhance the market’s attractiveness.

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.