What the future holds for private capital

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The Daily Pitch: VC

January 24, 2023

The Daily Pitch is powered by PitchBook’s industry-defining research and best-in-class data

In today's Daily Pitch, you'll find:

Our analysts forecast that global private capital AUM will reach $13 trillion by 2027.

Find out why the practice of buying stakes in private equity firms has recently gained traction.

A look at four of last year's key trends that pushed private equity over the New Year's Day finish line.

Today's Top Stories

Private market AUM growth will slow, but it won't die

Persistent global market headwinds will likely blunt the growth of total private capital AUM, but they won't stop it altogether. As the alternatives industry heads into a period of uncertainty, private closed-end funds are likely in for a progressive slowdown in capital commitments.

Our aggregate model suggests that global private capital AUM will reach a total of $13 trillion by 2027, a cumulative growth of 20.7% and a steep drop from the over 200% AUM growth over the past decade.

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GP stakes gain traction as fundraising slows

(YesPhotographers/Shutterstock)

The practice of buying stakes in private equity firms—also called general partner stakes—is gaining traction as institutional investors look at ways to gain diversified exposure to the asset class in a tough fundraising environment.

At the same time, firms are seeing GP stakes as a way of bolstering their balance sheets.

Recommended Reads

The growing success of chips using Arm technology is heaping pressure on Intel as SoftBank-owned Arm prepares for an IPO. [The Wall Street Journal]

Even as company cafeterias struggle with emptier workplaces, food is still important to employees. Here's how some businesses are reinventing the company meal. [The New York Times]

How women on boards navigate the line between warmth and competence. [Harvard Business Review]

Since yesterday, the PitchBook Platform added:

10

VC valuations

1784

People

528

Companies

21

Funds

See what our data software can do

Quick Takes

	The Daily Benchmark
	2010 Vintage Global Secondaries Funds
	VC Deals
	Zift secures $70M
	Dayforward lands $25M, acquires Commercial Travelers
	Mexico's Zenfi picks up $8.5M
	Calimero Network raises $8.5M
	Former FTX US head scores $5M for crypto startup Architect
	Grazzy gets $4.25M for digital tipping
	Portfolio Companies
	Quordle purchased by Merriam-Webster

The Daily Benchmark

2010 Vintage Global Secondaries Funds

Median IRR

13.60%

Top Quartile IRR

18.00%

1.50x

Median TVPI

Select top performers

Origami Opportunities Fund I

StepStone Ohio Secondary Opportunities Fund

Landmark Real Estate Fund VI

*IRR: net of fees

14 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Zift secures $70M

Zift Solutions, which offers a marketing and partner relations platform, has secured $70 million in a round led by Investcorp Technology Partners. Investcorp is now Zift's majority shareholder.

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Dayforward lands $25M, acquires Commercial Travelers

Digital life insurance startup Dayforward has raised $25 million in a round led by Axa Venture Partners. The startup has also bought Commercial Travelers Life Insurance Company (not to be confused with Travelers) from National Guardian Life Insurance Company.

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Mexico's Zenfi picks up $8.5M

Magma Partners has led an $8.5 million round for Mexico-based Zenfi, TechCrunch reported. The company's platform helps users understand their finances and taxes.

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Calimero Network raises $8.5M

Blockchain infrastructure startup Calimero Network has raised $8.5 million in seed funding co-led by Khosla Ventures, Lyrik Ventures and Near Foundation. The London-based startup was founded in 2022 and is creating a management platform for private networks, called "shards," on its blockchain.

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Former FTX US head scores $5M for crypto startup Architect

The former president of FTX US, Brett Harrison, has launched crypto trading platform Architect with a $5 million round, according to reports. The funding comes from investors including Coinbase Ventures, Circle Ventures and former White House communications director Anthony Scaramucci.

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Grazzy gets $4.25M for digital tipping

Grazzy, which offers a payments platform for hourly workers, has raised a $4.25 million seed round. Next Coast Ventures and Tuesday Capital participated in the round. The Austin-based startup has raised a total of $6.8 million.

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Insights on over 100K clinical trials now available in PitchBook

In response to market volatility and slowing innovation in the computer hardware and software space, investors are turning to healthcare—specifically, non-cyclical industries like biotech and pharma—as the next wave of high-impact, high-return opportunities. However, biotech and pharma investing contain a different set of risk profiles compared to tech startups. Progress through clinical trial stages is the best indication of the ultimate commercial viability of a new drug or medical device—and therefore, the likelihood of achieving a solid investment return.

To help investors isolate biotech and pharma companies with the highest chance of success, we've launched a new clinical trial integration, providing insights on over 100,000 clinical trials alongside our industry-leading funding data. With this new tool, investors can reduce time spent on opportunity discovery and due diligence by viewing a company's funding status alongside its drug development pipeline.

Explore our new clinical trial integration.

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Portfolio Companies

Quordle purchased by Merriam-Webster

Wordle competitor Quordle, which offers an online game that features four words to be guessed at once, has been acquired by dictionary giant Merriam-Webster for an undisclosed amount. The New York Times purchased Wordle in January 2022 for at least $1 million.

View details

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Chart of the Day

"It is likely that banks will gradually return to underwriting new LBO loans late in 2023 as the backlog clears and the leveraged loan market becomes more liquid—but not before ceding significant share to direct lenders."

Source: PitchBook's 2022 Annual US PE Breakdown

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