Well calculated: Floating fintech firms will boost profitability over the next five years

Private equity firms pool investment funds to purchase companies. Industry firms then attempt to implement managerial and operational changes to improve the company's performance before selling it for a profit. These transactions often involve a large amount of debt that is met by the revenue generated from the acquired company. Private equity firms have similar revenue structure to the fund management industry, largely consisting of a management fee and performance fee. Industry players charge annual management fee of an estimated 2% of the capital of the fund. Performance fee, also referred to as carried interest, is usually an estimated 20% of profit from investments...read more.

Industry Statistics & Market Size
Annual Growth 14-19
Forecast Growth 19-24

Industry Threats & Opportunities

  • Private equity and venture capital firms have had difficulty finding prospective acquisitions
  • Improved trading conditions have attracted new industry entrants over the past five years
  • Positive business confidence and strong sharemarket conditions will fuel more profitable exits
  • Industry Report - Industry Analysis Chapter

    Private equity firms use a combination of debt and equity to purchase companies, which often includes firms in financial distress. The private equity firm then tries to improve the purchased company’s performance before selling it for a capital gain. Performance improvement is achieved through measures such as introducing new management, changing operating practices, and capital injections that allow the purchased firm to make strategic investments. Private equity firms generally allocate purchased companies a four-to-five-year investment period, during which they commit resources to enhancing a company’s enterprise value. At the end of the period, the company is sold to other investors or private equity groups at a significant premium. Pri...purchase to read more.

    Additional Insights for the Private Equity Industry

    IBISWorld has determined the most important Key Success Factors for the Private Equity are:

  • Having a good reputation
  • Having a clear market position
  • Development of credible and soundly based investment strategies.
  • IBISWorld analysts also discuss how external factors such as All Ordinaries index and Business confidence index in the Private Equity industry impact industry performance..

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    What's in this report

    What is the Private Equity Industry?

    Private equity firms manage investments in private companies. They may invest their own capital, raise funds from external investors to invest on their behalf, or do both. Investments can include venture and growth capital for emerging companies, as well as buyouts, which involves purchasing a publicly traded company to take it private. Firms earn revenue from external capital management fees and from any gains made on their own investments.

    Industry Products
  • Early-stage investments
  • Late-expansion investments
  • LBOs, MBOs and MBIs
  • Industry Activities
  • Private equity fund management on behalf of external investors
  • Internally funded private equity investment
  • Participation in the management of portfolio companies
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • All Ordinaries index
  • Business confidence index
  • Cash rate
  • Value of managed funds

  • Current Performance
  • Historical context
  • Post-crisis performance
  • Exits
  • Chart: Revenue Growth

  • Industry Outlook
  • Profitability
  • More investment options
  • Competition
  • Table: Private Equity Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Private Equity Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Life Insurance
  • Superannuation Funds
  • Consumers

  • Key Selling Industries
  • Custody, Trustee and Stock Exchange Services
  • Investment Banking and Securities Brokerage
  • National and Regional Commercial Banks

  • Products & Services
  • Early-stage investments
  • Late-expansion investments
  • Other
  • LBOs, MBOs and MBIs
  • Chart: Private Equity Industry Products and Services Segmentation

  • Demand Determinants
  • Demand for investment
  • Demand for funding

  • Major Markets
  • Overseas investors
  • Other investors
  • Superannuation funds
  • Trusts
  • Corporate investors
  • Chart: Major Market Segmentation for the Private Equity Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Private Equity

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Private Equity Industry

  • Industry Globalization
    Pacific Equity Partners Pty Limited, Archer Capital Pty Limited, Champ Group Holdings Pty Limited,
  • Table: Pacific Equity Partners Pty Limited - financial performance
  • Table: Archer Capital Pty Limited - financial performance
  • Table: Champ Group Holdings Pty Limited - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Private Equity Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Private Equity Industry
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)
  • Total Assets (2010-2024)
  • Wages (2010-2024)
  • Purchases (2010-2024)
  • Profit (2010-2024)
  • Depreciation (2010-2024)
  • Rent (2010-2024)
  • Utilities (2010-2024)
  • Other (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Cloud Computing
  • The external hosting and storage of computer functions that are accessible via the internet.
  • Collective Investment Scheme
  • A fund that pools investors' money before investing. These funds enable participation in a wider range of investments and generate economies of scale in terms of transaction and management costs.
  • Fintech
  • Relating to financial services and making use of innovative technology.
  • Management Buy-In
  • A process whereby an outside management team, with financial backing from private equity, buys a company and replaces its management.
  • Private Equity Fund
  • A pool of money raised from investors before being invested in private equity deals.
  • Venture Capital
  • A sub-segment of private equity that encompasses the capital provided to start-up and early-stage companies to help bring ideas or inventions to market.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Private Equity market research report provides the latest industry statistics and industry trends, allowing you to identify the products and customers driving revenue growth and profitability. The industry report identifies the leading companies and offers strategic industry analysis of the key factors influencing the market.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Private Equity:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Private Equity market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Private Equity, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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