From the Editors

If there is a single theme dominating the private equity industry in 2025, it is uncertainty, much of which is emanating from unsettled and erratic U.S. economic and trade policy, along with continued geopolitical volatility. In such an environment, it is difficult to make projections, determine value or assess risk. So it is that deal volume is down around the world. Sponsors are finding that fundraising continues to be challenging, while investment managers must contend with ongoing investor demand for distributions amidst challenging exit conditions. The debt market is tepid. The regulatory front is similarly in flux, with the SEC pivoting toward deregulation, federal ESG-related initiatives and regulations being rolled back, and the White House taking a more assertive position toward the nexus of foreign investment and national security.

But if there is uncertainty, it has a positive tone, as if there is a collective waiting for the dust to settle before shifting the engine into higher gear. Dry powder remains ample. There is notable activity in add-ons and carve-outs, and take-privates appear to be on the rise. The fund finance market is strong, with an expanding lender base offering innovative solutions. Further, the private equity investor pool is poised to expand: in the EU, regulatory developments are underway that will give individual investors substantially increased access to private fund products, and there are signs that the United States may be moving in a similar direction. So, while the immediate path forward may not be entirely clear, there is broad confidence that the industry and the market are pointed in the right direction.

We hope you find the 2025 Private Equity Midyear Outlook to be a useful summary of where the market stands during these very interesting times and how things might unfold in the months ahead.