Preqin's 2023 outlook argues that even though venture capital was the alternative asset class most exposed to 2022's market turmoil, the resulting drop in entry valuations and softened deal competition could make 2023 a strong vintage year, since falling public equity valuations also dragged private company pricing down alongside it. Aggregate deal value through Q3 2022 reached $346.3 billion, just 51% of the $685.1 billion completed across all of 2021, as fund managers pulled back on deployment, even while global venture AUM climbed to $2.45 trillion by March 2022 from $2.23 trillion at the end of 2021. Fund managers were sitting on $530.8 billion of dry powder by the end of Q3 2022, a 40.7% jump from December 2021, forecast to grow further to $659.1 billion, giving investors substantial uncommitted capital available to deploy into a market Preqin expects will see slower fundraising and performance growth over the next five years relative to the prior period, even as total AUM keeps expanding.

LPs and fund managers deciding whether to keep deploying capital into a bear market get a specific, quantified argument for why 2023 could actually be a strong vintage year rather than a period to sit out entirely, since lower entry valuations and reduced deal competition historically tend to produce stronger eventual returns for the funds that invest during the downturn itself. The dry powder figures are a useful benchmark for founders trying to gauge how much capital is realistically available even during a fundraising slowdown, since $530.8 billion in uncommitted capital sitting with fund managers signals real firepower still exists even when headline deal activity looks weak. The report's five-year forecast of slower but still meaningfully positive AUM growth for venture capital, relative to a sharper pullback in some other alternative asset classes, is also useful context for allocators deciding how to weight venture within a broader private markets portfolio during a period of macroeconomic uncertainty.