Private Equity - Sri Lanka | Statista Market Forecast

The deal value in the Private Equity market is projected to reach US$2.88m in 2024.
It is expected to show an annual growth rate (CAGR 2024-2025) of 45.52% resulting in a projected total amount of US$4.20m by 2025.
The average size per deal in the Private Equity market amounts to US$2.88m 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 1.45 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 Sri Lanka is witnessing a minimal decline in growth, influenced by factors such as economic instability, limited investor confidence, and challenges in regulatory frameworks, which hinder substantial investment opportunities and market expansion.

Customer preferences: The Private Equity market in Sri Lanka is experiencing a notable shift as investors begin to favor sustainable and socially responsible investment opportunities. This emerging trend reflects changing consumer preferences towards brands that prioritize environmental, social, and governance (ESG) factors, driven by a younger demographic that values ethical practices. Additionally, the rise of tech-savvy consumers has led to increased interest in digital platforms and innovative startups, prompting private equity firms to explore ventures that align with these evolving lifestyle factors and cultural expectations.

Trends in the market: In Sri Lanka, the Private Equity market is undergoing a significant transformation as investors increasingly prioritize sustainable and socially responsible investment opportunities. This shift is characterized by a growing demand for businesses that integrate environmental, social, and governance (ESG) factors into their operations. Additionally, there is a noticeable uptick in investments targeting innovative startups, particularly those in the technology sector, as younger, tech-savvy consumers drive preferences for digital solutions and ethical practices. These trends highlight a crucial pivot towards responsible investment strategies, signaling profound implications for industry stakeholders in terms of aligning their portfolios with evolving consumer values.

Local special circumstances: In Sri Lanka, the Private Equity market is being shaped by the island's unique geographical positioning and rich cultural heritage, which presents both challenges and opportunities for investors. The country’s biodiversity and natural resources drive a focus on sustainable investment in eco-tourism and agriculture, aligning with global ESG trends. Moreover, the regulatory environment is evolving, with the government encouraging foreign direct investment and startup incubators, fostering a vibrant ecosystem for innovation. These local factors enhance investment potential while promoting responsible business practices.

Underlying macroeconomic factors: The Private Equity market in Sri Lanka is significantly influenced by macroeconomic factors, particularly the central bank's monetary policy and interest rate fluctuations. Lower interest rates can enhance capital availability, making borrowing more attractive for both investors and businesses, thereby stimulating private equity investments. Conversely, rising interest rates may curb access to financing, leading to a slowdown in deal activity. Additionally, domestic economic health, reflected in GDP growth and inflation rates, impacts investor confidence and valuation metrics. Global economic trends, such as shifts in commodity prices and foreign investment flows, also resonate within the local market, affecting overall performance and investor sentiment.

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.