McKinsey’s Global Private Markets Review 2025 highlights a mixed year for private markets in 2024, with fundraising declining across all major asset classes. Private equity fundraising dropped 24%, while real estate fundraising reached its lowest level since 2012. Despite this, capital deployment grew by double digits, supported by a more stable financing environment that encouraged increased deal activity. Notably, private equity sponsors distributed more capital to limited partners than they raised for the first time since 2015, and infrastructure deal value rose by 18%.
Private debt remained attractive due to its senior position in the capital structure and the growing demand for nonbank financing options. Investment managers adjusted by exploring alternative vehicles such as evergreen and continuation funds and focused more on operational transformation and value creation. Limited partners showed greater interest in direct involvement with general partners and continued allocating capital to private markets, particularly infrastructure. While the real estate sector remained uneven, segments like data centers and senior housing reported strong returns.
These trends emphasize the need for agile financial management amid evolving market conditions. CFOs must focus on optimizing cash flow and returns as sponsors return more capital than they raise. Careful capital allocation toward resilient sectors like infrastructure and prudent risk management in private debt is critical. Additionally, CFOs play a vital role in aligning investment strategies with operational improvements and maintaining strong investor relations amid growing limited partner engagement. Despite challenges such as geopolitical uncertainty, valuation pressures, and a backlog of exits, private markets demonstrate resilience going into 2025. CFOs are positioned to guide organizations with flexible capital management and strategic investments that support sustainable, long-term growth.
