Private equity to surge to $7 trillion by 2020
The global private equity market will expand to about $7 trillion (€6.2 trillion) by 2020 from half that in 2013 as investors from sovereign wealth funds to individuals seek alternatives to stocks and bonds, according to consulting firm PwC.
The industry will reach $6.5 trillion to $7.4 trillion depending on factors such as monetary policy and gross domestic product growth, PwC said in a report, compared to $3.6 trillion in 2013. The firm expects alternative assets, which also include real estate and hedge funds, will swell to $13.6 trillion to $15.3 trillion, from $7.9 trillion two years ago.
"It's really about broadening the client base," Mike Greenstein, PwC's global alternatives leader, said. Managers of alternative assets pitch the investments as a way of diversifying holdings and decreasing correlation with stock and bond markets.
Blackstone Group, the world's biggest alternatives manager and a big player in the Irish market, has expanded assets under management by 18pc annually for the past three years, in large part by attracting more money from sovereign wealth funds, wealthy individuals and family offices. The largest firms will also benefit from increasingly replacing banks in capital-market activities, according to PwC.
If Blackstone maintains its 2013 market share and alternative assets rise to $15.3 trillion, the New York-based firm will command about $515bn, compared to $310bn today.