2025 PE & TMT Investment Outlook: Resilient Deals Amid Fundraising Drop

The private equity sector’s tech, media, and telecoms (TMT) vertical endured a sharp retreat in fundraising during 2025. While US$88.24 billion was raised by funds solely focused on TMT, that figure represents a steep drop of around 34% year-over-year and an even more dramatic fall from 2022’s peak of US$211 billion. Broader PE fund‐raising also slid: in 2025, aggregate capital raised across all types topped US$735 billion, the weakest full‐year total since 2020.

Nevertheless, capital deployment—particularly in dealmaking — didn’t erode to the same extent. The McKinsey Global Private Markets Report shows that tech’s share of global PE deal value has remained relatively stable, ranging from 21% to 27% from 2018 through 2024; tech deal value in 2024 was US$554 billion despite a decline from 2021’s US$823 billion.

A key insight emerges from valuation multiples: tech sector assets continue to command premia over non-tech. In 2024, entry EBITDA multiples averaged ~14.2× in North America and ~14.9× in Western Europe for technology assets; by contrast, across all sectors those numbers were ~11.9× and ~12.1× in those respective regions. This reflects ongoing investor willingness to pay up for innovation, growth, resilience, and perhaps anticipated AI tailwinds.

On the LP side, sustained activity reflects conviction in long‐term secular trends. The European Investment Fund has made over 200 known commitments to TMT funds (vintage 2015–2025), including major ones like Jolt Capital V and Quantonation II. US LPs like New York State Common Retirement Fund and MetLife each recorded ~90–110 known tech‐related commitments. LPs continue to prefer funds specializing in tech innovation, cybersecurity, media, etc., even in a tougher macro environment.

Strategic implications:

• GPs will need to differentiate along subsectors (e.g., AI/ML infrastructure, cybersecurity, vertical software) to sustain count and size of fundraising amid weaker overall capital flows.
• LPs may benefit by leaning into managers with proven tech domain expertise or operational value‐add, given the premium valuations and stable deal activity.
• Valuation risk remains elevated: those entering at high multiples must ensure exit paths are clear and that investment theses hold under slower growth or rising rates.

Open questions:

• To what extent will lower fund‐raising in tech constrain secondary deal flow or later‐stage opportunities?
• How will rising regulatory scrutiny, especially around AI, data privacy, and competition law, alter risk-adjusted returns for tech PE investments?
• Will LPs’ commitment behavior shift toward newer fund‐structures, evergreen vehicles, or co‐investments given the tightness in committed capital?