- Global private equity investment rebounded in 2025, with Q3 value boosted by a handful of US megadeals despite softer volumes and high financing costs.
- Capital is concentrating in TMT and AI infrastructure, while corporate carve-outs—especially in industrials, energy, and utilities—offer complex but attractive entry points.
- Exit values are recovering unevenly as IPOs and continuation funds return, even as holding periods lengthen and exit volumes lag.
- Heading into 2026, GPs are prioritizing operational value creation, valuation discipline, scale, and tighter governance as LP scrutiny and regulatory demands rise.
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The private equity market in 2025 has shown signs of recovery after a period of macroeconomic stress. According to a KPMG analysis, global PE investment amounted to USD 1.5 trillion in the first three quarters of 2025, with Q3 alone delivering USD 537 billion—driven in part by a few megadeals in the US such as Electronic Arts ($54.7 billion) and Air Lease ($28.2 billion). In the US, announced PE investment hit USD 300.1 billion in Q3—its first time reaching that level since Q1 2022—despite soft volume and persistent financing headwinds.
Sectors are realigning. TMT (technology, media, telecommunications) led US PE investment by a wide margin, with nearly USD 286 billion by Q3 2025, followed by Consumer & Retail, Healthcare, and Infrastructure. Parallel to this, AI infrastructure—which includes data centers, network hardware, and semiconductors—is proving to be a core area of investment focus, both as end assets and as growth enablers. Carve-outs from corporates are increasing, especially in industrials, energy, and utilities, often involving complex reorganization, but yielding attractive entry points.
Exiting investments is becoming more rewarding, though uneven. US exit value rose to USD 485.5 billion by end-Q3 2025, surpassing totals from 2022-2024, even though exit volume remains well behind past years. IPOs rebounded, and continuation funds along with strategic sponsor-to-sponsor sales are increasingly used to extend holding periods or reposition portfolio companies.
Strategic drivers for 2026 are being shaped now. Firms with deep operational expertise, technological ecosystems, and scale are better positioned amid what Brookfield calls a “reset and resurgence” phase, where value creation is increasingly tied to operational improvement rather than multiple expansion. Valuation discipline, longer investment holding periods, and careful exit planning are becoming table stakes. Meanwhile, LP diversification is accelerating—smaller and newer GP firms will face pressure, and regulatory and governance rigor (especially in compliance and transparency) are increasingly demanded.
Open questions remain: how fast will interest rates fall and how much will that stimulate deal making? Will valuation gaps narrow enough globally to unlock exits? And will smaller GPs be able to compete in an environment favoring scale, operational discipline, capital intensity, and tech-driven value creation?
Supporting Notes
- KPMG reports that global PE investment reached USD 1.5 trillion during the first three quarters of 2025, including USD 537 billion in Q3 alone.
- US announced PE investment hit USD 300.1 billion in Q3 2025, its highest since Q1 2022.
- Sectors: US TMT‐led investment was USD 285.9 billion, consumer & retail USD 107.8 billion, healthcare USD 73.5 billion, infrastructure USD 65.1 billion in first three quarters 2025.
- Large public-to-private and take-private deals (e.g. EA at USD 54.7B, Air Lease USD 28.2B, Dayforce USD 12.4B) significantly drove value.
- Dry powder remains high (~USD 1.2-1.3 trillion globally), but 2025 saw elevated levels of aging dry powder (held 4+ years), reducing deployment speed.
- Carve-outs (particularly in industrials, energy, utilities) accounted for USD 15-20.6 billion in deal value in US/Canada in first half of 2025; Europe saw smaller carve-out deal volume.
- Private credit market in the US roughly doubled since 2019; dramatic growth in asset size and dry powder.
- Exits: US exit value totaled USD 485.5 billion by end-Q3 2025, exceeding exit totals for 2022-24; IPO exit value more than doubled year-over-year.
- In 2025, 30% of PE-backed companies had been held by GPs for at least five years, a record high.
- AI is deeply integrated in deal sourcing, diligence, portfolio transformation and exit planning; many firms believe it will be core to growth thesis for portfolio companies.
- EY reports sector focus shifting toward tech, industrials and insurance in 2026; technology adoption and LP diversification are also strategic priorities.
- Comparison 2024 vs 2025 (from a CohnReznick-Pitchbook table): deal count down ~8.9% but capital invested up nearly 19.6%; exit count down ~23.8% but exit value up ~76.1%.