ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø

Large PE firms raising bigger funds

U.S. private equity funds raised $66.8 billion across 80 deals in Q1 2025, a slight dip from the same period last year. The trend of fund sizes growing, driven by the largest and most established PE firms, continued. This consolidation has made fundraising challenging for smaller and mid-market players, especially first-time fund managers, as limited partners (LPs) prefer firms with broader platforms, proven track records, and perceived lower risk.

Value creation as a critical focus

With rising interest rates, PE firms in the U.S. have shifted their focus from add-ons and roll-ups to real value creation. This includes applying superior management techniques and technologies to improve operational efficiencies, lower costs, and enhance value outputs. While add-ons remain a tool, they are now smaller and more focused on driving value within a business rather than just providing scale.

Energy transition and transport

The energy sector in the Americas continued to attract strong interest from PE investors, with $35.7 billion in Q1 2025, compared to $94.4 billion in all of 2024. While enthusiasm for renewable energy assets has cooled, interest in traditional energy sources like natural gas and LNG has gained momentum. PE firms are also investing in energy transportation and storage infrastructure to capitalize on the growing need for reliable energy distribution.

Renewed interest in industrials

Despite being exposed to tariff-related risks, the U.S. industrials sector saw renewed PE interest in Q1 2025. The sector's evolution in response to pandemic-era disruptions, with more flexible and resilient supply chains, has made select companies attractive targets. Their operational adaptability and proactive risk management have positioned them to weather shifting macroeconomic conditions.

Exits remain challenging

There was widespread optimism that the IPO window would reopen in 2025, but renewed geopolitical tensions and macroeconomic uncertainty in Q1 2025 delayed these plans. Many companies postponed IPOs, and private exits remained soft due to valuation mismatches. However, some notable exits occurred in the industrial manufacturing, energy, and healthcare sectors. As LPs continue to pressure for returns, PE funds are exploring alternative liquidity strategies, including rolling assets into continuation vehicles.

Americas attracts largest share of PE investment

The Americas accounted for the largest share of proposed PE deployment in Q1 2025, with $287.1 billion in funding across 1,868 deals. In contrast, the EMA (Europe, Middle East, and Africa) region saw a decline in both deal value and count, falling to $109.1 billion across 1,555 deals. This was partly due to major elections and a challenging economic environment in key markets like the UK, Germany, and France.

In the ASPAC region, Japan accounted for $20.2 billion of the $37.5 billion in PE announced deal value, nearly matching its 2024 annual total of $22.8 billion. Regulatory pressures and cultural shifts have made carve-outs and major restructuring more socially acceptable, creating new avenues for PE investors. China, however, saw very slow activity, with just $4 billion across 36 deals.

Infrastructure remains a key focus

Infrastructure, including traditional sectors like energy transportation and storage, as well as IT and AI infrastructure, remained a significant focus for PE investors. The growing demand for processing capacity to support AI and generative AI has driven interest in data centers. This sector's ability to provide long-term stable cash flows makes it an attractive investment.

Corporate restructuring and carve-outs

Globally, many corporations are transforming their businesses to become more efficient, focusing on protecting core operations and assets. Carve-outs and sales to PE firms have become more common, especially in countries like Japan, which have historically been less receptive to PE buyouts. In India, the trend has shifted from minority investments to majority investments, reflecting a more active role by PE firms.

Flexible investment structures

PE firms are adopting more flexible investment structures, including minority stakes and co-investments with other PE firms, sovereign wealth funds, and family offices. This strategic shift allows firms to access a broader range of opportunities and manage risk more effectively, even in uncertain market conditions.