Private Equity: Episode 23 – History of PE: The Years 2015-2020

The strong momentum of Private Equity in the early 2010s continued into 2015. In 2016, funds reached a record annual fundraising of $221 billion and saw the emergence of "mega funds." These substantial funds exponentially increased the resources available to investment teams and would become increasingly numerous. Notable examples include:

• Thomas Bravo ‘Thomas Bravo Fund XII’ with $7.6 billion in 2016.
• Apax Partners ‘Apax IX’ with $9 billion in 2016.
• KKR ‘KKR Americas Fund XII’ with $13.8 billion in 2017.

As a counterpart to these fundraises, the level of capital awaiting deployment, known as "dry powder," also reached unprecedented amounts—$534 billion in 2016, increasing to $830 billion in 2019. This surplus capital was difficult to deploy, partly due to a very accommodative debt market that made deals easier to structure with limited funds, and also because the skyrocketing asset valuations during the period made finalizing investments more challenging.

The global surge in the sector continued until 2019. That year, fundraising hit $361 billion, investments reached $551 billion, and exits generated $405 billion. The global Private Equity stock reached a total of $3.2 trillion.

This massive influx of resources pushed management teams to invest in new sectors, particularly those related to environmental themes, which had previously received little attention from Private Equity. Venture Capital funds focused increasingly on tech startups, especially in cybersecurity, payment systems, and new technologies.

In France, a number of unicorns emerged during this time, such as:

• Back Market in late 2014.
• Exotec in 2015.
• Qonto, PayFit, and Alan in 2016.
• Sorare in 2018.

All of these companies benefited from the abundance of capital, enabling them to grow at a rapid pace.

Starting in 2020, however, the situation began to change: for the better until 2022, but then things would take a turn for the worse...