Global VC assets under management may soon hit ten figures

A new Preqin and Vertex VC Report indicates robust growth ahead for the venture capital markets.

Preqin and Vertex launched the joint research report called the Global Venture Capital Perspectives report on Wednesday.

The report studies the state of the global venture capital market and events and trends for the next five years.

Preqin and Vertex VC Report

According to the report, venture capital assets have doubled in the last five years. The total AUM reached $856 billion at the end of 2018. The two firms project that the industry could top $1 trillion in the coming years.

“Venture capital has long been one of the most prominent parts of the alternative assets industry in the public zeitgeist, but historically it has been only a small part of the investment landscape,” said Mark O’Hare, CEO of Preqin. “But activity has boomed in recent years, and with assets approaching [$1 trillion], it is important to examine the industry on its terms and offer a fresh perspective on how it got to this point, and what might lie in store.”

Preqin tracked more than 5,000 active venture capital fund managers as part of its study. It finds that the U.S. is the largest global market for venture capital.

However, China continues to show strong growth. The nation hosts three of the ten largest VC funds by capital raise. The report showed stronger VC investment growth in artificial intelligence & machine learning, healthcare technology, and the internet of things.

The report also indicates that fundraising and deal-making remain strong. However, high valuations and long exit waits remain challenges moving forward.

Challenges Loom in China?

The news on China doesn’t totally contradict another report released this week from the Emerging Market Private Equity Association revealed a slowdown in the Chinese market for private capital. Both reports suggest robust investment in areas like healthcare and AI.