Private Equity - New Zealand | Statista Market Forecast

The deal value in the Private Equity market is projected to reach US$1.74bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2025) of 1.61% resulting in a projected total amount of US$1.76bn by 2025.
The average size per deal in the Private Equity market amounts to US$173.50m 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 13.98 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 New Zealand is currently experiencing subdued growth, influenced by factors such as market saturation, cautious investor sentiment, and increasing competition among funds, which are challenging opportunities for new investments and returns.

Customer preferences: The Private Equity market in New Zealand is witnessing evolving investor preferences, with a growing focus on sustainable and socially responsible investments. Investors are increasingly seeking opportunities in businesses that prioritize environmental sustainability, diversity, and community engagement, reflecting a cultural shift towards ethical consumption. Additionally, demographic changes, including a younger, more socially conscious investor base, are influencing the types of companies that attract funding, particularly in sectors like clean energy and technology that align with these values.

Trends in the market: In New Zealand, the Private Equity market is experiencing a significant shift towards sustainable investing, with fund managers increasingly prioritizing environmental, social, and governance (ESG) criteria in their evaluation processes. This trend is driving investments into sectors such as renewable energy, sustainable agriculture, and technology firms that emphasize ethical practices. Furthermore, the rise of impact investing is attracting a younger demographic of investors who are keen to align their financial goals with their values. This evolution not only influences capital allocation but also encourages companies to adopt more responsible practices, ultimately reshaping the investment landscape.

Local special circumstances: In New Zealand, the Private Equity market is shaped by its unique geography, featuring a diverse landscape that encourages investments in industries such as renewable energy and sustainable tourism. The country's strong cultural emphasis on environmental stewardship, rooted in Māori values and traditions, fosters a collective commitment to sustainability among investors. Additionally, regulatory support for responsible investing, through guidelines from the Financial Markets Authority, further incentivizes private equity firms to prioritize ESG considerations, distinguishing the market from others globally.

Underlying macroeconomic factors: The Private Equity market in New Zealand is significantly influenced by overarching macroeconomic factors, particularly the central bank's monetary policy and interest rates. As the Reserve Bank of New Zealand adjusts interest rates to manage inflation and stimulate economic growth, these changes directly impact the cost of capital for private equity firms. Lower interest rates typically enhance leverage opportunities, making financing acquisitions more attractive and spurring deal activity. Conversely, rising rates can dampen investment enthusiasm by increasing borrowing costs and heightening risk aversion. Additionally, global economic trends, such as shifts in consumer demand and commodity prices, further shape investment strategies and sector focuses within the market.

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.