Private Equity - Hong Kong | Statista Market Forecast

The deal value in the Private Equity market is projected to reach US$3.19m in 2024.
It is expected to show an annual growth rate (CAGR 2024-2025) of 5.82% resulting in a projected total amount of US$3.38m by 2025.
The average size per deal in the Private Equity market amounts to US$399.40k 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 5.48 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 Hong Kong has seen a negligible decline, influenced by factors such as economic uncertainties, regulatory changes, and competition from alternative investment channels, which have impacted investor confidence and deal activity in the region.

Customer preferences: Investors in Hong Kong's Private Equity market are increasingly prioritizing sectors that align with sustainable and socially responsible practices, reflecting a broader cultural shift towards environmental consciousness. Demographic changes, such as the growth of millennials and Gen Z as decision-makers, are driving demand for investments in technology-focused and innovative startups. Additionally, the rise of remote work has prompted interest in sectors like digital infrastructure and e-commerce, indicating a transformation in investment strategies that favor agility and adaptability in evolving market conditions.

Trends in the market: In Hong Kong's Private Equity market, there is a notable shift towards sustainable investments, with funds increasingly targeting companies that prioritize environmental, social, and governance (ESG) criteria. Concurrently, the influx of millennial and Gen Z investors is fueling interest in technology-driven startups, particularly in sectors like fintech and green technology. The rise of remote work is also influencing investment strategies, leading to a focus on digital infrastructure and e-commerce solutions. These trends signify a broader evolution towards agile, socially conscious investing, impacting how industry stakeholders approach capital allocation and portfolio management.

Local special circumstances: In Hong Kong's Private Equity market, unique geographical factors like its strategic location as a gateway to Asia enhance access to diverse investment opportunities. The region's cultural emphasis on collective responsibility and sustainability aligns with the global shift towards ESG criteria, attracting funds that prioritize social impact. Additionally, strict regulatory frameworks foster transparency and trust, encouraging institutional investors to engage with local startups. This blend of cultural values, geographic advantages, and regulatory support drives a distinctive investment landscape focused on innovative, responsible growth.

Underlying macroeconomic factors: The performance of Hong Kong's Private Equity market is significantly influenced by overarching macroeconomic factors such as central bank policies, particularly interest rates, global economic trends, and local economic health. Low interest rates, implemented by the Hong Kong Monetary Authority to stimulate growth, enhance liquidity and encourage investments in private equity by reducing the cost of borrowing. Additionally, the global trend of rising digitalization and innovation fosters new market opportunities, attracting private equity funds seeking high-growth sectors. The interplay of stable fiscal policies and strong economic fundamentals further supports investor confidence, making Hong Kong an appealing destination for private equity investments focused on 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.