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Private equity cash returns hit 15-year low

Private equity funds experienced their lowest cash returns to investors since the 2008 financial crisis last year, with distributions at just 11.2% of net asset value, far below the 25-year median of 25%, according to Raymond James Financial Inc. High borrowing costs, market volatility, and economic uncertainty have impeded exits, limiting funds’ ability to repay capital to investors, affecting their capacity to invest in new or existing funds. The median asset holding period has extended to 5.6 years, prolonging the time to raise new funds to 21 months and resulting in a 29% decrease in new funds raised last year. Despite this downturn, total capital raised by buyout funds reached a record USD500bn, up 51% from 2022. However, the abundance of fundraising in 2021 and booming global stock indexes have diminished the attractiveness of private equity investments among institutional investors.


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