Private Equity - Puerto Rico | Statista Market Forecast

The deal value in the Private Equity market is projected to reach US$6.66m in 2024.
It is expected to show an annual growth rate (CAGR 2024-2025) of 8.47% resulting in a projected total amount of US$7.23m by 2025.
The average size per deal in the Private Equity market amounts to US$1.68m 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 3.81 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 Puerto Rico is facing a subdued decline, influenced by factors such as economic uncertainty, limited local investment opportunities, and regulatory challenges that hinder growth and attract outside capital.

Customer preferences: Investors in Puerto Rico's Private Equity market are increasingly focusing on sustainable and socially responsible investments, reflecting a growing consumer preference for ethical business practices. This trend is shaped by the island's cultural emphasis on community and environmental stewardship, as well as a younger, more socially conscious demographic. Additionally, evolving lifestyle factors, such as the rise of remote work, are prompting interest in innovative technologies and digital solutions, which are viewed as essential for fostering resilience and adaptability in local businesses.

Trends in the market: In Puerto Rico, the Private Equity market is increasingly gravitating towards sustainable and socially responsible investments, driven by a collective desire for ethical business practices among investors. This trend is propelled by the island's rich cultural heritage that values community and environmental protection. As a younger, more socially conscious demographic emerges, investments in innovative technologies and digital solutions are gaining momentum, essential for enhancing resilience in local businesses. These shifts not only reflect changing consumer preferences but also signal long-term implications for industry stakeholders, fostering a more sustainable and adaptable economic landscape.

Local special circumstances: In Puerto Rico, the Private Equity market is uniquely influenced by its geographical isolation and strong cultural emphasis on community ties. The island's vulnerability to climate change has heightened the focus on sustainable investments, prompting funds to prioritize resilience-building initiatives. Additionally, local regulatory incentives for renewable energy projects attract investment in innovative technologies. This combination of cultural commitment to social responsibility and the need for adaptive solutions creates a distinctive landscape, setting Puerto Rico apart from other markets in the region.

Underlying macroeconomic factors: The Private Equity market in Puerto Rico is significantly influenced by overarching macroeconomic factors, particularly central bank policies and interest rates. Low interest rates foster an environment conducive to borrowing, enabling private equity firms to leverage investments and enhance returns. Conversely, rising rates can increase the cost of capital, dampening investment activity. Additionally, the island's fiscal stability and economic recovery efforts post-hurricanes are crucial, as they instill investor confidence. Global economic trends, including inflation and international market volatility, further shape investment strategies, nudging funds toward more resilient sectors like renewable energy and infrastructure.

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.