Private Equity - Estonia | Statista Market Forecast

The deal value in the Private Equity market is projected to reach US$4.20m in 2024.
It is expected to show an annual growth rate (CAGR 2024-2025) of 4.41% resulting in a projected total amount of US$4.38m by 2025.
The average size per deal in the Private Equity market amounts to US$466.60k 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 9.17 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 Estonia is witnessing a minimal decline, influenced by factors such as cautious investor sentiment, regulatory challenges, and the need for innovative investment strategies to adapt to changing economic conditions while maintaining growth potential.

Customer preferences: In Estonia, private equity investors are increasingly focusing on sustainable and socially responsible ventures, reflecting a shift in consumer preferences toward ethical investment practices. This trend is driven by a younger demographic that prioritizes environmental stewardship and social impact in their purchasing decisions. Additionally, the rise of digitalization has encouraged investments in tech-driven startups that offer innovative solutions to traditional industries, aligning with the growing demand for efficiency and transparency in business operations.

Trends in the market: In Estonia, the Private Equity Market is increasingly gravitating toward sustainable investment opportunities, with a significant focus on green technologies and socially responsible enterprises. This shift reflects a broader global trend where investors are aligning portfolios with ESG (Environmental, Social, and Governance) criteria, driven by rising consumer demand for ethical business practices. Additionally, the integration of AI and data analytics is streamlining investment decision-making processes, enhancing transparency, and fostering innovation. Collectively, these trends are reshaping the investment landscape, driving industry stakeholders to adapt or risk obsolescence.

Local special circumstances: In Estonia, the Private Equity Market is uniquely shaped by its advanced digital infrastructure and a tech-savvy population, fostering an environment ripe for innovation. The country’s strong emphasis on e-governance and digital entrepreneurship attracts foreign investments, particularly in fintech and green tech sectors. Additionally, Estonia’s commitment to EU regulations enhances investor confidence, promoting transparency and adherence to ESG standards. This confluence of factors positions Estonia as an attractive hub for sustainable investments, differentiating it from larger, more traditional markets.

Underlying macroeconomic factors: The Private Equity Market in Estonia is significantly influenced by overarching macroeconomic factors such as central bank policies, particularly interest rates, which impact the cost of capital for investments. Lower interest rates encourage borrowing, enabling private equity firms to leverage funds for acquisitions and growth, thereby enhancing returns. Additionally, Estonia's stable economic growth and low inflation create a conducive environment for investment. The country's focus on digital innovation attracts venture capital, further stimulating the market. Global economic trends, including shifts towards sustainability, also play a vital role, as investors seek opportunities in the flourishing fintech and green tech sectors.

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.