Private Equity - Papua New Guinea

The deal value in the Private Equity market is projected to reach US$4.08m in 2024.
It is expected to show an annual growth rate (CAGR 2024-2025) of 10.64% resulting in a projected total amount of US$4.52m by 2025.
The average size per deal in the Private Equity market amounts to US$2.56m 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 2.22 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 Papua New Guinea is witnessing minimal decline, influenced by factors such as economic instability, limited access to capital, and regulatory challenges that hinder investor confidence and market expansion.

Customer preferences: In Papua New Guinea, there is a growing demand for sustainable and socially responsible investment opportunities, reflecting a shift in consumer preferences towards ethical considerations. Investors are increasingly interested in businesses that prioritize environmental stewardship and community engagement, influenced by younger demographics advocating for sustainable practices. Additionally, the rise of entrepreneurship among local communities is fostering a dynamic startup ecosystem, prompting private equity firms to adapt their strategies to tap into these emerging markets and align with evolving consumer values.

Trends in the market: In Papua New Guinea, the private equity market is experiencing an increasing interest in investing in sustainable ventures, driven by a heightened awareness of environmental and social governance (ESG) factors among investors. Moreover, local entrepreneurs are harnessing traditional knowledge and resources to create innovative solutions that address community needs, which is attracting private equity firms seeking impactful investments. This trend not only reflects a shift towards responsible investment practices but also signifies a broader movement towards enhancing economic resilience, ultimately fostering growth that benefits both investors and local communities.

Local special circumstances: In Papua New Guinea, the private equity market is uniquely shaped by its diverse geography and rich cultural tapestry, with over 800 languages and numerous indigenous communities. This diversity fosters a strong emphasis on culturally relevant sustainable investments, particularly in sectors like agriculture and renewable energy. Additionally, the regulatory environment is evolving, with the government promoting local entrepreneurship through incentives. As a result, private equity firms are increasingly drawn to opportunities that not only promise financial returns but also enhance social equity and environmental stewardship within local communities.

Underlying macroeconomic factors: The private equity market in Papua New Guinea is significantly influenced by macroeconomic factors, particularly central bank policies and interest rates. Lower interest rates can stimulate borrowing, encouraging private equity firms to leverage funds for more aggressive investments in sectors such as agriculture and renewable energy. Conversely, rising rates may deter investment, leading to more cautious capital deployment. Additionally, global economic trends, such as fluctuating commodity prices and trade dynamics, impact domestic investment attractiveness. Furthermore, fiscal policies aimed at enhancing infrastructure and business development create a more conducive environment for private equity growth, aligning with the nation’s sustainable development goals.

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.