“After a strong year of dealmaking in 2024, investor sentiment has shifted back to a more cautious tone in Q1 2025 amidst geopolitical tensions,” data firm Pitchbook said in its European Q1 2025 private equity breakdown , published on 10 April 2025. “Q1 deal value dropped 24.6% quarter-on-quarter whilst deal count lagged by 17.7% quarter-on-quarter.”
“Geopolitical tensions with the US accompanied by political instability in France and Germany have taken centre stage in Q1, causing hesitation among investors,” Nicolas Moura, senior research analyst, EMEA private capital at Pitchbook, wrote in the report. “Trade tariffs will impact PE portfolio companies and may reshape certain industries.” At the time of publication, the US has introduced a coming from the EU, along with a . Tariffs “also tend to be inflationary, and this could cause further macroeconomic headwinds down the line,” noted the analysis.
Looking at Luxembourg specifically, private equity deal value dropped from €5.3bn in Q1 2024 to €1.9bn in Q1 2025, said data from Pitchbook. This mirrors the overall European trend. In the first quarter of 2025, Luxembourg accounted for 1.99% of total European PE deal value (which stood at €97.7bn).
Deal count in the grand duchy, on the other hand, was fairly stable quarter-on-quarter. There were nine deals in Q1 2024 and ten deals in Q1 2025. Luxembourg accounted for 0.7% of European private equity deal count in the first quarter of the year (there were a total of 1,408 deals in Q1 2025).
The DACH region--made up of Germany, Austria and Switzerland--and the Nordic countries saw relatively strong quarters, said Pitchbook’s report, with dealmaking growing year-on-year. “The Nordic region has remained somewhat insulated from recent market corrections and has shown more resilience in dealmaking thanks to its independent central banks.” The UK and Ireland, on the other hand, saw its lowest quarterly deal count since the pandemic started in early 2020.
Exit activity, like deal activity, was “sluggish.” “Exit activity dropped quarter-on-quarter but was higher year-on-year. Exit value dropped 18% whilst exit count was 25.2% lower,” said Pitchbook. “We continue to see an increasing backlog of companies staying private for longer.”