Market Trends of United States Private Equity Industry
Lower Interest Rates and Tax Benefits Raising the Private Equity Adaption In United States
Private equity firms are benefiting from significant market tailwinds triggered by historically low interest rates as well as record fundraising, which is at an all-time high with the US. The low interest rates in the United States and abundant capital continue to spur Private equity activity (lower debt financing costs) and tax law uncertainty to spur exit activity to accelerate timing and avoid potentially unfavorable tax outcomes in the forecast period.
Private equity funds in the United States are typically treated as partnerships for US tax purposes, regardless of whether they are organized as limited partnerships or LLCs. The fund itself is then generally not taxed in the US, except in certain instances of taxes resulting from partnership audits. Thus witnessing the growth in Businesses raising their Funds from Private Equity in the United States and estimated growth for Private Equity throughout the forecast period is seen.
Tiger Global Management and Advantage Capital are Dominating the Market
Tiger Global Management turned down millions of dollars worth of shares in mid- and late-stage start-ups. It was done to give cash to investors in its older funds when there weren't many other options to get out, like going public. Some assets it looked to unload were bought in recent years at significantly higher valuations. Most of Tiger Global’s private investments are held by its venture funds, which are long-term vehicles, giving it the flexibility to sell now or later.
Advantage Capital provides financing to established and emerging companies located in communities underserved by conventional sources of capital. Advantage Capital has won a spot on the list for its investments in small and growing businesses in economically underserved communities, to support jobs and drive inclusive economic growth.
