How blockchain technology is impacting private equity, private credit markets and SMEs

Private equity (PE) involves investment funds that acquire and manage private companies or delist public companies, with the goal of improving their operations and profitability before eventually selling them for a profit. According to McKinsey & Co., since 2008, PE funds have generally outperformed other private market asset classes and comparable public market investments. However, this performance can vary and the lack of public financial disclosures for privately held assets makes assessing their performance challenging. McKinsey estimates that the total value of PE funds exceeds $13trillion, with over $3.7trillion in cash and waiting to be invested. Private equity became recognised as a separate investment category from the mid-20th century onwards, garnering notable attention during the 1980s and 1990s. Over time, the sector has diversified to encompass buyouts, venture capital, growth capital and distressed asset investments.

The significance of private equity in the global econ…