Private Equity - Dominican Republic

The deal value in the Private Equity market is projected to reach US$6.53m in 2024.
It is expected to show an annual growth rate (CAGR 2024-2025) of 8.93% resulting in a projected total amount of US$7.12m by 2025.
The average size per deal in the Private Equity market amounts to US$1.67m 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 5.47 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 Dominican Republic is facing minimal decline, impacted by economic instability, regulatory hurdles, and global market conditions. However, renewed investor interest and potential growth sectors may provide opportunities for recovery in the near future.

Customer preferences: Investors in the Dominican Republic's Private Equity market are increasingly focusing on opportunities that cater to the evolving preferences of a young and tech-savvy population. This demographic shift, marked by a growing middle class, is driving demand for innovative solutions in sectors such as e-commerce, fintech, and renewable energy. Furthermore, cultural trends emphasizing sustainability and social responsibility are prompting funds to prioritize investments that align with these values, paving the way for impactful growth strategies in the region.

Trends in the market: In the Dominican Republic, the Private Equity market is observing a significant shift towards investments in technology-driven sectors, particularly e-commerce and fintech, as the young population increasingly embraces digital solutions. Meanwhile, the renewable energy sector is gaining momentum, driven by both government incentives and a heightened awareness of sustainability. Additionally, there is a growing emphasis on social responsibility, encouraging funds to support companies that promote ethical practices. This convergence of trends is fostering a robust environment for innovative startups, while also motivating established firms to adapt, ultimately enhancing the region's economic landscape.

Local special circumstances: In the Dominican Republic, the Private Equity market is uniquely shaped by its strategic geographical location and rich cultural heritage, which attract investments in tourism and hospitality alongside tech. The government’s regulatory framework, aimed at simplifying business operations, further stimulates foreign investment. Additionally, the island’s vibrant entrepreneurial spirit fosters innovation, particularly among young professionals keen on digital transformation. This combination of local dynamics encourages a diverse investment landscape, creating opportunities for growth across various sectors while enhancing economic resilience.

Underlying macroeconomic factors: The Private Equity market in the Dominican Republic is significantly influenced by macroeconomic factors such as interest rates set by the central bank, overall economic stability, and the fiscal policies in place. Lower interest rates generally encourage borrowing, making it easier for private equity firms to finance acquisitions and expand their portfolios. As the government implements measures to control inflation and stimulate growth, the availability of capital increases, attracting both local and foreign investors. Additionally, a stable macroeconomic environment enhances investor confidence, promoting more significant investments in high-potential sectors like tourism, technology, and renewable energy, ultimately bolstering the private equity landscape.

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.