Private Equity - South Korea | Statista Market Forecast

The deal value in the Private Equity market is projected to reach US$13.82bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2025) of 6.49% resulting in a projected total amount of US$14.72bn by 2025.
The average size per deal in the Private Equity market amounts to US$166.50m 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 86.22 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.

For more information on the data displayed, use the info button right next to the boxes.

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 South Korea has seen negligible growth recently, influenced by factors such as uncertain economic conditions, regulatory challenges, and a lack of investment diversification, which have hindered investor confidence and overall market expansion.

Customer preferences: In South Korea, investors are increasingly gravitating towards sustainable and socially responsible investment opportunities, driven by a growing awareness of environmental and social governance (ESG) factors. This cultural shift, particularly among younger demographics, reflects a preference for portfolios that align with ethical values. Additionally, the rise in tech-savvy consumers has led to a heightened interest in sectors such as fintech and digital health, influencing private equity firms to adapt their strategies towards innovative businesses that cater to evolving lifestyle preferences and societal needs.

Trends in the market: In South Korea, the private equity market is experiencing a notable shift towards investments in sustainable and impact-driven enterprises, aligning with a global emphasis on environmental, social, and governance (ESG) considerations. This trend is particularly pronounced among millennials and Gen Z investors, who prioritize ethical investment choices. As a result, private equity firms are increasingly focusing on sectors like renewable energy, sustainable agriculture, and green technology. This strategic pivot not only meets evolving consumer expectations but also positions firms to capitalize on emerging regulatory frameworks aimed at promoting sustainability, ultimately enhancing long-term value for stakeholders.

Local special circumstances: In South Korea, the private equity market is uniquely influenced by the country's rapid technological advancements and a strong cultural emphasis on community welfare. The government's supportive policies for startups encourage investment in innovative sectors, particularly in sustainable technologies. Additionally, South Koreans’ heightened awareness of environmental issues fosters a demand for ethical investment, compelling private equity firms to prioritize green projects. This local context not only accelerates the shift towards sustainable investments but also positions South Korea as a leader in responsible capital allocation within the global private equity landscape.

Underlying macroeconomic factors: The private equity market in South Korea is significantly influenced by macroeconomic factors, particularly central bank policy and interest rates. The Bank of Korea's monetary policy, including interest rate adjustments, directly affects the cost of capital for private equity firms. A low-interest-rate environment encourages borrowing and leverages, facilitating increased investments in growth-oriented ventures. Conversely, rising interest rates can dampen investment activity, as higher costs reduce the attractiveness of leveraged buyouts. Additionally, global economic trends, such as trade dynamics and foreign direct investment inflows, further shape market performance by impacting the liquidity and risk appetite of investors in South Korea's evolving private equity landscape.

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.