Preqin released a report predicting global alternatives Assets Under Management (AUM) could reach $29.22tn by 2029, with the reported level being $16.78tn at the end of 2023.
This would set the industry up for exceeding $30tn AUM by 2030.
Private equity AUM is expected to more than double, climbing from $5.80 trillion at the end of 2023 to $11.97 trillion by 2029. This growth is likely to be driven by increased participation from non-institutional investors, including family offices, wealth managers, private banks, and individual investors, who currently have relatively low exposure to the asset class, according to the Preqin report.
In the venture capital sector, the report details how early-stage investments are projected to see the highest annualized growth rate of 13.2% from 2023 to 2029. The "venture general" category is expected to follow closely with an 11.1% growth rate, while late-stage VC growth may be limited to 8.1% due to a challenging exit environment and heightened regulatory scrutiny. Overall, total VC AUM is forecast to reach $3.59 trillion by 2029, up from $1.85 trillion.
The private debt market is also set for growth, with average internal rates of return (IRR) expected to rise from 8.1% in the 2017-2023 period to 12.0% from 2023 to 2029. Distressed debt is anticipated to average an even higher IRR of 13.4%. Total private debt AUM is projected to reach $2.64 trillion by 2029, increasing from $1.50 trillion.
Preqin reports that hedge funds are projected to grow to $5.73 trillion by 2029, up from $4.53 trillion in 2023. This growth rate of 4.0% is the lowest among major alternative asset classes, though hedge funds are expected to remain the second-largest category by AUM, trailing only private equity.
Real estate is forecast to see a 5.1% annualized growth rate in fundraising from 2023 to 2029, with total private real estate AUM expected to rise to $2.66 trillion from $1.61 trillion. Meanwhile, the unlisted infrastructure sector has faced a slowdown in fundraising but is anticipated to rebound starting in 2026, leading to an expected total AUM of $2.35 trillion by 2029, up from $1.27 trillion.