In its “Global Report-Private Equity in 2026” research note published in December 2025, Preqin noted that the global private equity industry showed tentative signs of recovery throughout 2025, despite an ongoing cyclical slowdown. This momentum was partly supported by an anticipated easing of monetary policy, including a positive response to the Federal Reserve (Fed) rate cut in September.

Shift from lower volume to higher deal value

Aggregate private equity deal value for the first three quarters of 2025 reached 82% of the 2024 total. This high value was supported by a structural shift towards fewer but larger transactions, reflecting a strategic pivot by established fund managers with deep equity reserves towards high-conviction deals focused on scale.

Muted fundraising conditions

Global private equity fundraising remained relatively soft, totalling $507bn (see chart 1)  in the first three quarters of 2025, equivalent to 73% of the full-year 2024 amount. Regional fundraising saw North America regain momentum, raising $354bn, while Europe-focused fundraising dropped significantly to $120bn (-37%).

Not surprisingly given our extensive coverage here, here and here, Secondaries funds attracted a record share of global fundraising in Q1–Q3 2025, accounting for 15% of the total, surpassing the previous five-year average of 8% (see chart 2) Preqin argued that the rise of secondaries is due to factors such as “lower capital liquidity” leading LPs to seek more liquid strategies and general partners (GPs) delaying some deal-making activities.

This increased preference for secondaries and growth strategies resulted in a decline in the buyout share of aggregate capital raised, which fell from 63% in 2024 to 53% by the end of Q3 2025. This is a somewhat surprising development given that we previously noted that buyouts have outperformed public markets contrary to growth and venture capital over a long stretch of time.

Private wealth investors, including family offices and wealth managers, have demonstrated increasing interest in private equity, and their share of total capital raised is expected to expand.

It’s tougher for late-comer GPs

The market remains challenging for first-time managers, who accounted for only 7% of closed funds and a historical low of 2.3% of total global private equity fundraising capital in Q1–Q3 2025. The report observed that investors are highly discerning, favouring established GPs with strong track records.

This selectivity is reinforced by a widening performance gap between the highest- and lowest-performing managers in newer vintages (2020–2022). While upper-quartile funds from the 2022 vintage improved their Internal Rate of Returns (IRRs), the research found that the lowest-performing funds saw returns approach zero (see chart 3). In terms of subsector returns, secondaries funds have shown stronger performance compared to buyout, growth, and fund-of-funds strategies in recent vintages.

Still little exit activity

Exit activity remains a significant constraint, with 80% of investors identifying exit challenges as a top concern in November 2025, matching the high levels seen during 2022's interest rate shocks.

Although exit volume was subdued, the average exit value increased to $843mn in Q1–Q3 2025, higher than the previous five-year average of $658mn. Trade sales continued to dominate exit types, accounting for 57% of total exits, while the share attributed to IPOs further declined to a dismal level of 4% (see chart 4).