Private equity firms have enjoyed startling growth over the past few years, posting a 13.7% compound annual growth rate (CAGR) since the end of 2005. That compares to a 7.5% CAGR for hedge funds and 7.7% for other asset managers. These private equity firms now manage $3.65 trillion in global assets around the world.
The growth curve is now going to flatten, according to a report from Deloitte, which analyzed how the growth story may play out for the private equity industry in the next five years. The researchers think it’s most likely for private equity assets under management (AUM) to hit $4.6 trillion by 2020, representing a 5% compound avearage growth rate. “Private equity growth has been slowing over the past few years, a trend that may persist,” the report said. “If this happens, managing to a new normal in private equity may be next on the agenda.”