Between 2017 and June 2023, tracked investor allocations toward private equity have nearly doubled. Simultaneously, assets under management (AUM) for private equity more than doubled from $2.98tn in December 2017 to $6.55tn in December 2022. While investment banks and sovereign wealth funds have had the greatest relative growth in their allocations to the asset class, public sector pension funds are the investors with the largest allocation, reaching $1.08tn in 2021 and $1.41tn as of June 2023.
The start of 2023 has been difficult in terms of fundraising for private equity. However, as governments consider allowing pensions to allocate more to alternatives, there may be room for continued growth from this investor type. As mentioned in the Private Equity Q2 2023: Preqin Quarterly Update, investor sentiment appears more positive toward private equity in the next 12 months than it was in June 2022.
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