United States Private Equity Market Competition, Forecast and Opportunities, 2024-2025 & 2030: Growing Trend Towards ESG Integration, Private Equity Firms Targeting Middle-Market Companies
March 19, 2025 by ResearchAndMarkets
Dublin, Jan. 31, 2025 (GLOBE NEWSWIRE) — The “United States Private Equity Market, By Region, Competition, Forecast and Opportunities, 2020-2030F” report has been added to ResearchAndMarkets.com’s offering.
The United States Private Equity Market was valued at USD 475.08 Billion in 2024, and is expected to reach USD 860.39 Billion by 2030, rising at a CAGR of 10.46%
The United States Private Equity Market is one of the fastest-growing sectors, as businesses increasingly favor venture capital and buy-out funding options for their investments and organizational financing. There has been a rise in the establishment of new funds by seasoned private equity professionals from well-established firms, leading to a significant increase in available deployable capital.
One of the primary drivers of the United States Private Equity Market is the growing allocation of capital from institutional investors. Pension funds, sovereign wealth funds, insurance companies, and endowments have been increasingly seeking private equity investments as part of their diversified portfolios. These institutional investors are attracted to private equity due to its potential for higher returns compared to traditional asset classes like public equities and bonds. The long-term investment horizon of private equity also aligns with the goals of these institutions, which typically focus on steady, risk-adjusted returns over extended periods.
In recent years, institutional investors have been raising their allocations to private equity to take advantage of favorable market conditions, the ability to access higher-growth opportunities, and the relatively higher returns compared to more traditional investment vehicles. As institutions seek to hedge against market volatility and inflation, private equity provides an attractive alternative investment option. The increased capital from institutional investors has helped drive the growth of the U.S. private equity market, making it a central component of the broader financial landscape.
Key Market Trends
Increased Focus on Technology and Innovation
A prominent trend in the United States Private Equity Market is the growing focus on technology and innovation-driven sectors. As industries become increasingly digital and technology evolves rapidly, private equity firms are placing more emphasis on tech-driven investments. This includes sectors like fintech, artificial intelligence (AI), cybersecurity, and biotech, where rapid growth and disruptive potential offer substantial returns.
Private equity firms are particularly drawn to startups and scale-ups with innovative business models that leverage technology to disrupt traditional industries. Additionally, the COVID-19 pandemic accelerated digital transformation, prompting private equity firms to seek opportunities in companies that are leading technological advancements. This trend has led to higher capital inflows into technology-focused private equity funds, with firms increasingly targeting tech-based portfolio companies to capitalize on their growth and scalability potential.
Environmental, Social, and Governance (ESG) Integration
ESG (Environmental, Social, and Governance) considerations are increasingly being integrated into private equity investment strategies. As investors and stakeholders place more emphasis on sustainable and responsible investing, private equity firms are incorporating ESG factors into their due diligence and portfolio management processes. Firms are now more focused on funding companies that align with ESG principles, which includes prioritizing companies with strong environmental practices, ethical governance, and social responsibility.
This trend is driven by growing consumer demand for sustainable business practices, increasing regulatory pressure, and the desire for long-term value creation. Investors believe that ESG-driven businesses can achieve better risk-adjusted returns, and private equity firms are aligning their portfolios accordingly. This shift is also creating new opportunities, as ESG-compliant companies often have competitive advantages, including improved operational efficiency and stronger reputations.
Private Equity Firms Targeting Middle-Market Companies
A significant trend in the U.S. Private Equity Market is the growing interest in middle-market companies. These companies, typically with annual revenues between $10 million and $1 billion, offer attractive growth potential and are increasingly becoming the target of private equity investments. Middle-market firms often operate in niche markets or specialized industries and present private equity firms with opportunities for value creation through operational improvements, market expansion, and strategic acquisitions.
Many private equity firms are seeking to tap into the untapped potential of these companies, which may not have the scale or resources to compete with larger firms. The trend is driven by the availability of debt financing, which makes acquiring and growing middle-market companies more feasible, as well as the ability to generate higher returns due to these companies’ growth potential and lower valuations compared to large-cap firms. This shift has led to more private equity firms targeting middle-market sectors for their investments.
Segmental Insights
Investment Type Insights
In the United States Private Equity Market, Large Cap investments is the dominating segment. Large-cap companies, typically defined as those with a market capitalization of over USD10 billion, have historically been the primary focus for private equity firms due to their established business models, consistent cash flows, and lower risk profiles. These companies often offer substantial opportunities for operational improvements, strategic acquisitions, and value creation through management expertise. Additionally, large-cap companies tend to have more robust access to capital, which enhances their attractiveness for private equity investments.
The large-cap sector also benefits from its capacity to scale, which makes it easier for private equity firms to implement significant changes, enhance profitability, and generate returns. While mid-cap and small-cap companies present higher growth potential, they come with added risks, which can deter some investors, particularly those looking for stable and less volatile returns. Despite growing interest in mid and small-cap markets, large-cap investments remain the dominant segment due to their ability to deliver consistent and large-scale returns for private equity firms.
Regional Insights
The Northeast region dominated the United States Private Equity Market, primarily due to its concentration of major financial hubs, such as New York City, Boston, and Philadelphia. New York, in particular, serves as the heart of the U.S. financial industry, housing numerous private equity firms, venture capitalists, and institutional investors. This region is home to a robust network of large institutional investors, including pension funds, endowments, and family offices, all of which contribute significantly to the growth of private equity.
Additionally, the Northeast boasts a highly developed infrastructure, sophisticated legal and financial services, and access to a diverse range of industries, including technology, healthcare, and finance, all of which attract private equity investments. The region’s proximity to both national and global markets allows firms to engage in strategic deals, making it a magnet for private equity activity. Furthermore, the strong presence of universities and research institutions fosters innovation and the creation of high-growth startups, further boosting private equity investments. Thus, the Northeast continues to lead in the U.S. private equity market.
Key Attributes:
| Report Attribute | Details |
| No. of Pages | 85 |
| Forecast Period | 2024 – 2030 |
| Estimated Market Value (USD) in 2024 | $475.08 Billion |
| Forecasted Market Value (USD) by 2030 | $860.39 Billion |
| Compound Annual Growth Rate | 10.4% |
| Regions Covered | United States |
Report Scope:
Key Market Players
- Blackstone Group
- Carlyle Group
- Warburg pincus LLC
- Neuberger Berman group LLC
- Chicago Capital Holdings
- CVC Capital Partners
- Kohlberg Kravis Roberts & Co
- Bain Capital LP
- Thoma Bravo LP
- Gottenberg associates LLC
United States Private Equity Market, By Investment Type:
- Large Cap
- Mid Cap
- Small Cap
United States Private Equity Market, By Application:
- Early Stage Venture Capitals
- Private Equity
- Leveraged Buyouts
United States Private Equity Market, By Region:
- South
- West
- Midwest
- Northeast
For more information about this report visit https://www.researchandmarkets.com/r/yrfq2x
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