The year just past (2017) was, once again, strong for private markets. Even as public markets and common property rose, investors continued to show interest and confidence in equities. Private asset managers raised a record sum of nearly $750 billion globally, extending a cycle that began eight years ago. Within 2017’s tide of capital, one trend stands out: the surge of megafunds (funds of more than $5 billion), especially in the United States and particularly in buyouts of managers.

The largest funds have become more common, as they have on average delivered the highest returns over the past decade. Meanwhile, buyout trends of managers have accelerated.

Investors’ motives for investing in private markets remain the same, more or less: the potential for alpha, and for consistency at scale. Investments are already heavily allocated to private markets and do not appear keen to switch out.

Meanwhile, sovereign wealth funds are looking to increase their exposure to private markets, increasingly using co-investments and direct investing to boost their ability to deploy capital. The research indicates that, in the past couple years, the industry’s largest firms have begun to collect a growing share of capital, perhaps starting to consolidate a fragmented industry.

Yet company managers did not have it all their way. One explanation is an increased price of acquisitions.