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Digital innovation and transformation across existing workflows are imperative for PE firms wishing to maintain a competitive edge among peers. The mood changed in early summer. New government policies that provide incentives for certain ESG investmentsmost notably the US Inflation Reduction Act of 2022are likely to strengthen this correlation further. IPOs remain the first choice of exit methods among APAC investors (39%), and it is also increasingly attractive to LatAm investors, rising to 22% from only 4% last year. Bookmark content that interests you and it will be saved here for you to read or share later. 2021 was an exceptional year for exits: not only did the number of exits increase by 34% from 2020, but exit value also increased by 57%. [14], Private Equity firms gradually catching the digitalization train. Private markets fundraising fell 11 percent to $1.2 trillion, as the denominator effect affected some LPs ability to allocate capital. Geographically, 45% of respondents were from Europe, 19% were from North America, 15% were from APAC, 8% were from the Middle East & Africa and 13% were from Latin America. No investment should be made without proper consideration of the risks and advice from your tax, accounting, legal or other advisors as you deem appropriate. Bain's Nirad Jain and Kara Murphy share insights from our annual report. For those that can identify and partner with such private equity managers, there exists a promising opportunity for outperformance in the region. Performance of every private markets asset class declined relative to 2021 but continued to outperform public market equivalents at current marks, though private market valuation changes often lag those in public markets. 11 Bain & Company, "Asia-Pacific Private Equity Report 2022". Datenschutz For some strategies, a contingency fee may be incurred in addition to the fee mentioned above. Across all regions, digitalization is high up on PE agendas and awareness has risen significantly. The continued momentum in 2022 was understandable, as debts current yield and senior position in the capital stack have long made it a haven in volatile periods. EY. Vikram Raju discusses five key findings from COP27. Macroeconomic headwinds, including rising inflation and interest rates, coupled with negative public market performance (17.7 percent) triggered the aforementioned denominator effect, and LPs scaled down new commitments. Going forward, shifting macroeconomic conditions will make efficiency initiatives an increasingly important value driver in Asian private equity. 2022 is likely to be an active year for private equity exits, and many investors are preparing to divest their portfolio companies. Jim Caron, Co-Lead Global Portfolio Manager and Co-Chief Investment Officer of the Global Balanced Risk Control (GBaR) Team, shares his macro thematic views on key market drivers. Investing in Asian private equity comes with a unique set of challenges and risks beyond what this paper has explored. Most of the current fund commitment decisions were made last year, which was impacted by the denominator effect as public markets . The Covid-19 pandemic re-emphasized the importance of localized operations, as closed borders made it impossible for non-local managers to undertake transactions. Infrastructure and natural resources grow and evolve, Private markets advance their ESG agendas. Going into 2022, all regions are clearly at different stages of digital technology adoption. Certain information contained herein constitutes forward-looking statements, which can be identified by the use of forward-looking terminology such as "may," "will," "should," "expect," "anticipate," "project," "estimate," "intend," continue" or "believe" or the negatives thereof or other variations thereon or other comparable terminology. Federal and state tax laws are complex and constantly changing. Direct lending fundraising declined from 2021, but only marginally, raising over $100 billion for the second consecutive year. Sustainability-related deals (the E) increased by 7 percent to nearly $200 billion, proving resistant to the deal-making headwinds that affected other asset classes. The report finds that despite solid foundations, last year was slow for both fundraising and investments, while performance held up better than the global . (As of 09/09/2021). OPAQUE ENTRY VALUATIONS First and foremost, the evidence supporting a positive correlation between ESG and financial performance continues to mount, as long as the underlying company is healthy. 2021 was a record year for the PE industry as investment activity surpassed the trillion-dollar mark for the first time. Alle Morgan Stanley Investment Funds anzeigen, View All 1GT: Climate Investing Reinvented. Each region benefited from an investment spree, with Latin America (LatAm) and North America (NA) witnessing the highest uptick in aggregate deal value year-on-year. Conversely, dollars raised by sub$5 billion funds decreased by 28 percent. Signs of a flight to quality, or at least to better-known managers, emerged. Download Alternatives in 2022 | Preqin Conclusion Screening results include only M&A Exits not IPOs. This material was not intended or written to be used, and it cannot be used with any taxpayer, for the purpose of avoiding penalties which may be imposed on the taxpayer under U.S. federal tax laws. [12] Robust private equity exits may set record year. North America registered a 111% increase in aggregate deal value on the previous year and accounted for half of the total transaction value ($534 billion).