Private markets in the first half of 2025 experienced mixed performance across asset classes, with private equity struggling to deliver exits amid trade disruptions and geopolitical uncertainty. Exit activity slowed sharply after a strong start, with managers relying on alternative liquidity tools such as continuation vehicles and NAV financing while LPs pressed for traditional cash distributions. Fundraising remained weak, with capital supply tightening as investors reassessed geographic and segment exposure. Mid-market buyout funds regained investor interest due to their resilience, while infrastructure stood out as a stable haven, raising $134.3 billion in commitments during the first half, already surpassing 2024’s full-year total. Private real estate showed early signs of recovery, buoyed by stronger fundraising, deal flow, and surging demand for data centers.
Private debt consolidated its position as a consistent performer, delivering record fundraising in Q1 2025 and attractive returns supported by floating rate structures and lower leverage multiples. Managers are also expanding into adjacent strategies such as secondaries and infrastructure debt. However, default risk is beginning to surface, with rising covenant breaches and increased use of payment-in-kind facilities. For CFOs, the mid-year outlook reflects both opportunity and caution. Liquidity constraints are reshaping allocation strategies, while infrastructure, mid-market buyouts, and private credit remain core areas of focus for investors navigating ongoing macroeconomic uncertainty.
