Private equity activity rebounded in 2025, according to a recent McKinsey report. After several years of slow dealmaking, buyouts and exits recovered strongly, and IPO activity returned. Buyout and growth deals above $500 million rose 44% to exceed $1 trillion, the highest level recorded for transactions of that size. Exit value also increased more than 40%, helped by nearly doubling IPO-related exits. Large transactions returned as well, including the announced $55 billion take-private of Electronic Arts. The report notes, “Dealmaking returned in 2025 in force: Buyouts surged, exits rebounded, and initial public offerings reemerged.”
Despite the rebound, private equity firms face tougher operating conditions. Asset prices remain high, with the median purchase multiple rising to 11.8 times EBITDA in 2025. At the same time, more than 16,000 portfolio companies have been held for over four years, and liquidity for investors remains limited. Fundraising has also become more competitive, with Europe and the Asia–Pacific seeing declines in capital raised. The report states, “Success on the road ahead will depend less on speed than on having the right vehicle—fit for the changed terrain.” Industry participants are increasingly focusing on operational improvements and new technologies such as AI to support returns.
