The private market investment landscape is undergoing a significant transformation, driven by technological innovations and changing investor priorities. A recent study by KPMG Private Markets Pulse: Private Market Investment Priorities provides valuable insights into the evolving investment strategies and risk-awareness of private market investors. KPMG US surveyed over 300 private equity, asset management, venture capital, and family office investors across various industries to gather data on their priorities, concerns, and investment approaches. The study reveals that private market investors are placing a growing emphasis on financial performance and scalability potential when evaluating potential investments.
| Key Priorities of Private Market Investors | Percentage |
| Financial Performance and Scalability Potential | 80% |
| Robust Governance, Ethical Practices, and Social Responsibility | 40% |
In addition to financial considerations, private market investors are increasingly prioritizing companies that demonstrate a strong track record of innovation and a proactive approach to adopting emerging technologies. This trend underscores the importance of staying ahead of technological curves to maintain a competitive advantage and capitalize on new market opportunities.
The Impact of Emerging Technologies on Private Market Investors
The study highlights that investors expect AI to transform nearly every aspect of portfolio companies within the next year, with significant implications for data analytics and business intelligence, cybersecurity, and finance and accounting.
- AI is expected to impact data analytics and business intelligence (52%)
- AI is expected to impact cybersecurity (52%)
- AI is expected to impact finance and accounting (50%)
As technology adoption increases, so do the risks associated with capturing and analyzing large volumes of data. Private market investors acknowledge the importance of robust cybersecurity measures to safeguard against potential threats and ensure long-term stability.
Key Risks and Challenges
| Key Risks and Challenges | Description |
| Cybersecurity Risks | The increasing reliance on digital infrastructure and AI poses significant cybersecurity risks, including data breaches and system vulnerabilities. |
| Data Management Risks | The ability to capture and analyze large volumes of data is becoming increasingly challenging, posing significant risks to portfolio companies. |
Furthermore, private market investors recognize that long-term resilience and sustainable growth are closely linked to strong governance, ethical practices, and social responsibility. While financial performance, future projections, and return on investment (ROI) remain critical considerations, governance and non-financial reporting are increasingly important to driving investor confidence.
Recommendations for Founders
“Founders seeking funding should articulate their company’s strengths, future potential, and comprehensive risk management strategies with clarity and transparency. This approach will help attract investment, maintain investor confidence, and foster trust.” – Tarek Ebeid, KPMG Private Leader and Partner in Charge – Northern California Audit Practice, KPMG US.
Founders should also prioritize robust governance, ethical practices, and social responsibility to demonstrate their commitment to long-term sustainability and growth. By doing so, they can build trust with investors and establish a strong foundation for their business.
Conclusion
The private market investment landscape is undergoing a significant transformation, driven by technological innovations and changing investor priorities. Private market investors are prioritizing companies that demonstrate a strong track record of innovation, robust governance, and social responsibility. Founders seeking funding should focus on articulating their company’s strengths, future potential, and comprehensive risk management strategies with clarity and transparency to attract investment and maintain investor confidence.
