In 2024, the private capital and alternatives market underwent transformative changes, reflecting both the resilience and adaptability of the industry. From surges in capital-raising activities to evolving private equity and venture capital strategies, the sector responded to global economic pressures and opportunities.

Notably, the Australian equity capital markets raised $32.3 billion, a 23 percent increase over 2023, even as broader volatility lingered. Here are the ten themes that defined the year:

1. Surge in Capital-Raising Activities

Capital-raising activities in 2024 saw a remarkable surge, particularly in technology, digital infrastructure, energy, and real estate. This growth was driven by investor appetite for innovation and companies with robust growth trajectories.

2. Expansion of Private Equity and Venture Capital

Private equity (PE) and venture capital (VC) evolved significantly, responding to 2024’s economic complexities. Despite a 32 percent drop in deals in Q3 versus Q2, VC firms adapted by tightening terms and focusing on high-growth sectors.

3. Growth in Private Debt Markets

Private debt emerged as a standout performer, offering stable returns amid uncertainty. Funds focused on energy transition and digital infrastructure, attracting institutional investors seeking diversification and predictable income.

4. Hedge Funds Navigate Market Volatility

Hedge funds grew AUM despite high rates and inflation fears. Macro funds, in particular, leveraged global trends to deliver strong performance, reinforcing their role in diversified portfolios.

5. Real Estate Sector Faces Interest Rate Pressures

Rising interest rates slowed fundraising and deal flow, though larger funds capitalized on distressed opportunities. Sustainable, energy-efficient properties and urban regeneration projects gained investor interest.

6. Infrastructure Investments and Energy Transition

Despite fundraising headwinds, renewable energy, EV charging, and smart-grid projects attracted significant capital, driven by public-private partnerships and decarbonization goals.

7. Increased M&A Activity in Private Markets

M&A surged as asset managers sought scale and specialization. BlackRock’s $12.5 billion purchase of Global Infrastructure Partners was a marquee deal, highlighting consolidation trends.

8. Challenges in Venture Capital Dealmaking

Deal volume declined amid uncertainty and tighter valuations, yet AI, renewables, and healthcare startups still secured funding by demonstrating clear value propositions.

9. Evolution of Fundraising Strategies

With LPs at allocation limits, continuation funds and structured secondaries rose in popularity. Transparency and GP–LP alignment became key to securing commitments.

10. Anticipation of IPO Market Rebound

Signs of an IPO revival emerged as rate-cut hopes grew. Technology, fintech, and healthcare companies are expected to lead a strong 2025 pipeline.

Conclusion

The private capital and alternatives market in 2024 balanced challenges and opportunities, from capital-raising surges to strategic fundraising shifts. As we move into 2025, stakeholders must navigate short-term pressures while pursuing long-term growth objectives.