Future Forces 2023: The megatrends shaping the private capital industry
08 December 2023
The fortunes of private equity (PE) firms and other private capital institutions changed abruptly in mid-2022 when central banks, led by the US Federal Reserve, launched the first in a round of successive interest rate increases. Senior fund partners suddenly faced the end of the low cost deal financing that had fuelled transaction growth for over a decade.
Technological changes remain strong and will continue to offer attractive growth opportunities to private capital firms. And their role will be instrumental in funding the drive across industries to achieve net zero carbon emissions.
Some key takeaways
- Despite a challenging environment, private capital is likely to continue flowing to high tech sectors, including start-ups developing artificial intelligence (AI) and renewable energy solutions.
- Automation, the Internet of Things (IoT) and cybersecurity figure as the top technologies likely to have the biggest positive impact on the industry.
- Executives from private capital firms harbour deep concerns about portfolio companies’ ability to secure needed talent and skills. Skills will be the biggest challenge their businesses face in the years to come.
