Worldwide private equity fundraising hit US$692 billion in 2019, surpassing the asset class’s peak in 2007.

Private equity activity trended towards fewer but larger funds seeing commitments from investors, according to a new report by the Callan Institute.

Buyout funds, in particular, saw a leap in commitments, jumping to 55.1 per cent of commitments overall in 2019, up from 40 per cent in 2018. Mezzanine debt was the only other segment that increased its market share, by two per cent to 11.1 per cent. Growth equity dropped 10 per cent, to 11.7 per cent.

Business products and services saw, by far, the highest number of buyout investment deals, scooping up 3,129 and more than $119 billion in investments. That was followed by information technology, which saw 1,371 deals and more than $91 billion in investments and construction products and services, at 1,230 deals and more than $83 billion in investments.

However, the number of venture capital deals was down 12 per cent compared to 2018. The IT sector swept up the most investments, with 12,091 deals and more than $100 billion in investments, far outstripping the second most popular category — construction products and services — with 6,148 deals and more than $60 billion in investments.

Meanwhile, private equity-backed merger and acquisition exits fell by 12 per cent for the year, to 2,054. Private equity-backed merger and acquisition initial public offerings also had a tough year, with just 95 buyout-backed IPOs — down 41 per cent from 2018. Choppy equity markets and less than ideal outcomes for other recent IPOs are making such deals less attractive, the report noted.

Over the year, private equity outperformed public markets significantly. Turbulent markets during the last quarter of 2018 continued to churn at the start of 2019, making private equity’s relative performance shine brighter, the report said.