“Crazy?” Private Equity Funds Outnumber McDonald’s, Facing Intense Industry Competition  

Private market giants are hoping the next growth wave will separate the wheat from the chaff in this overcrowded industry.  

At the “Women, Money, and Power” event in London on Wednesday, KKR & Co. partner Alisa Wood said there are 19,000 private equity funds in the U.S., compared to 14,000 McDonald’s locations.

How can there be more private equity funds than McDonald’s? That’s crazy, right?  

After decades of rapid growth, rising interest rates have made it harder for firms to exit investments, find new excess return opportunities, and return cash to investors. This slowdown could disrupt the investment, return, and reinvestment cycle driving the alternative asset market.  

Private equity firms are raising and deploying billions into AI (especially data centers), hoping this emerging asset class will spark the next growth wave for the struggling industry. They are acquiring AI companies and data center providers through equity and real estate businesses, using these assets as collateral for loans.  

Brookfield Asset Management CFO Hadley Peer Marshall said about $7 trillion is needed to fund AI’s rapid growth. Her firm is among many large private capital firms seeking a central role in this technology’s development.  

Kathleen McCarthy-Baldwin, co-head of global real estate at competitor Blackstone, said Blackstone is highly enthusiastic about data centers due to surging computing demand. She stated her firm believes there is no bubble in the sector.