Read our latest insights into the U.S. private equity market. We cover monthly deal activity and size, fundraising, exits, leveraged loans, and a look ahead.
Key Takeaways
- Deal activity: The drop in March deal count pushed Q1 deal count to the lowest quarterly level since the onset of the pandemic in Q2 2020. Deal value was up considerably in the quarter as there was an increase the number of $1Bn+ deals.
- Fundraising: U.S. PE fundraising levels remained low in the first quarter of the year and capital raised fell for a third consecutive quarter.
- LBOs: LBO deal count was relatively flat for the quarter, but LBO value was up over 100% on a QoQ basis. LBO purchase price multiples ticked up in Q1 to 11.7x, up from 11.0x in 2024.
U.S. PE Deal Activity
- Deal count: March deal count dropped dramatically, pushing Q1 2025 deal count to the lowest level since the onset of the pandemic in Q2 2020. Q1 2025 deal count fell on both a QoQ and YoY basis.
- Deal value: While deal count fell, deal value jumped in both March and Q1 2025. The first quarter of the year had the highest deal value since Q2 2022.
Source: Dealogic. U.S. only. Deals announced/completed through March 31, 2025.Created with Datawrapper
U.S. PE Deal Size
- Deal size: Larger deals made up a larger proportion of PE deals in the first quarter of 2025. Q1 2025 saw the share of $1Bn+ deals increase to 37%, compared to 31% for FY 2024.
- $1Bn+ deals: Q1 2025 saw 43 deals over $1Bn, an increase of 34% from the 32 $1Bn+ deals in Q4 2024 and 48% from the 29 $1Bn+ deals in Q1 2024.
Fundraising Trends
- Fundraising: U.S. PE fundraising activity declined in Q1 2025, as capital raised fell for the third consecutive quarter.
- Fund size: Pitchbook data shows that Q1 2025 saw an increase in the number of funds raised between $500M–$1Bn, with that range comprising 18% of PE fund count, compared to 12% in 2024.
Exit Activity
- Exit activity: After exits started to pick up in 2024, Q1 2025 saw exit count fall on both a QoQ and YoY basis. However, exit value was up considerably in Q1 compared to both Q4 2024 and Q1 2024.
- Continuation funds: As GPs look to return investor capital, continuation funds are becoming a more popular exit strategy to provide LPs with liquidity. Q1 2025 saw more continuation funds than in the first quarter of the previous 5 years.
IPO Activity
- IPO activity: Momentum in IPO activity continued in Q1, with the number of IPOs increasing for a fifth consecutive quarter.
- PE-backed IPOs: PE firms capitalized on openings in the IPO market in Q1 2025, and the first quarter saw a strong start to the year for PE-backed IPOs. However, recent volatility in public markets has paused many IPO launch plans.
LBO Activity
- LBO activity: The number of LBOs was relatively flat on a QoQ and YoY basis. In line with broader trends in PE deal value, LBO deal value also saw a significant jump in the first quarter.
- LBO multiples: LBO EBITDA purchase price multiples rose to 11.7x in Q1, up from 11.0x in 2024.
- Equity contribution: The average equity continuation in LBOs rose slightly in Q1 2025 to 52%, up from 50% in 2024. Average rollover equity contribution was 6% in Q1, higher than the 1–3% seen in the previous five years.
Leveraged Loans
- Leveraged loans: Q1 2025 U.S. leveraged loan issuance dropped compared to last quarter but was in line with Q1 2024 issuance levels. Product mix has been very consistent, with institutional loans holding ~70–75% share over the last two quarters.
- U.S. institutional loan breakdown: New money issuance in Q1 2025 was down ~30% from Q4 2024, but up ~35% from Q1 2024. The share of new money loans in Q1 2025 was below 20% for the second consecutive quarter.
A Look Ahead
- M&A dealmaking outlook: Public and private markets are experiencing volatility, and dealmaking may face ongoing periods of choppiness over the coming months. Dealmakers are hoping macroeconomic clarity will emerge, and have shifted expectations for a pickup in M&A activity to the second half of the year.
- IPO outlook: Amid the recent market havoc, many IPO plans have hit pause. High levels of IPO activity are unlikely to return until public markets stabilize, and while the VIX fell from previous highs on April 8th, it remains elevated from levels seen throughout Q1 2025.
- IPOs as exits: PE and VC firms may choose alternative exit paths instead of waiting for equity markets to normalize to exit through an IPO.
- Strategy spotlight: Amid the current macroeconomic backdrop, certain strategies in private capital are attracting investor attention.
- Growth equity: In the current cycle, financial engineering will be difficult, and value creation will be achieved by maximizing EBITDA margins and growth, which bodes well for growth strategies.
- Special situations: Strategies that mix elements of debt and equity and have a broad mandates are well suited for the current market backdrop.
- Tariff implications: PE firms will need to navigate the impact tariffs will have on both dealmaking and portfolio company operations.
- Existing portfolio companies: Firms will need to understand and manage tariff exposure across their portfolio.
- Due diligence: Extended timelines are expected as buyers will want to take a deeper dive on the impact tariffs may have on supply chain dynamics.
- New asset sales: Pricing may become more challenging as tariffs complicate forward EBITDA projections.
- Opportunities: Dislocation also creates opportunities that firms will seek in an attempt to put money to work amid this market volatility.
