Q1��25 Pulse of Private Equity �� Americas insights

PE market in Americas facing increasing headwinds

2024 was one of the strongest years on record for private equity investment and deal activity �� second only to the record-breaking highs of 2021. This performance underscored the ongoing strength and resilience of the PE market across the Americas. While the US captured the lion’s share of activity, other jurisdictions also saw significant momentum. Canada, notably, reached a new all-time high in PE deal value in 2024.

That strength continued into Q1��25, with the Americas recording $287 billion in PE investment. Canada stood out once again, attracting $26.3 billion in PE capital during the quarter �� an exceptional figure relative to historical norms.

However, despite the solid investment totals, overall deal count across the region fell short of 2024’s pace. Much of the decline can be attributed to growing concerns over escalating trade tensions, particularly tariffs between the US and key trading partners such as Canada, Mexico, and others in the region. These uncertainties have led many PE firms to adopt a more cautious stance as they evaluate new opportunities.

PE investors increasingly embracing minority deals

Within the Americas, but particularly in the US, several of the large PE funds have begun to make inroads into the private wealth space �� making their funds available to smaller, high-net worth investors and family offices. This has led such “retail funds�� to embrace more diversified investment approaches, including minority investments where they are not actively involved in value creation directly but want to open the door to specific investment opportunities for their retail investors.

Minority investments have also increasingly come into play in cases where PE funds in the Americas may have invested in a business based on a value creation thesis but then realized that the opportunity was not quite what they expected. In these cases, PE funds have become far more proactive about selling part of their stake to a PE fund with relevant expertise to mitigate risks and drive returns for both funds.

Energy sector sees strong PE investment in Q1��25, in addition to B2B

The energy sector was particularly active across the Americas in Q1��25, with $35.7 billion in PE investment �� already representing over a third of the $94.4 billion invested in the space during all of 2024. While deal count was slightly below last year’s pace, the quarter featured several high-value transactions. Notable proposed deals included CDPQ’s $10 billion agreement to acquire Canada-based Innergex Renewable Energy,¹ the $2.8 billion sale of a stake in AEP’s transmission companies to the KKR-PSP consortium,² Brookfield’s $1.7 billion acquisition of National Grid’s onshore renewables business,³ and Blackstone’s $1 billion deal to acquire Potomac Energy Centre.��

The B2B sector also saw strong momentum during Q1��25. Major transactions included BlackRock’s $22.8 billion investment in Panama Ports,�� QXO’s $11 billion acquisition of Beacon Roofing Supply,�� Clearlake Capital’s planned $7.7 billion acquisition of Dun & Bradstreet,�� and the $3 billion acquisition of Triumph Group by Warburg Pincus and Berkshire Partners.��

PE firms targeting essential support sectors in AI and other hot areas

Interest in AI solutions continued to accelerate across the Americas during Q1��25, and private equity firms increasingly shifted their focus to industries that support and enable the broader AI ecosystem. Rather than competing for high-valuation core AI assets, many firms pursued opportunities in adjacent sectors. Data centres, in particular, emerged as a hotspot for PE investment during the quarter, given their foundational role in powering AI infrastructure. Similarly, PE investors targeted undervalued companies operating one or two tiers down the value chain �� businesses providing essential services such as hardware support, cloud infrastructure, data connectivity, and analytics �� viewing them as strategic plays to gain exposure to AI-driven growth without the premium price tags.

Trends to watch for in Q2��25

As Q2��25 begins, private equity investment across the Americas is expected to remain somewhat subdued, with investors showing growing hesitation �� particularly outside of the US �� amid ongoing trade and tariff tensions. Until there is greater policy clarity, many PE firms are likely to remain on the sidelines, carefully evaluating potential risks before deploying capital.

However, if trade disputes are resolved or de-escalated during the quarter, the stage could be set for a strong rebound in investment activity in the second half of 2025. In the meantime, sectors less affected by tariff pressures �� such as information technology, business services, financial services, infrastructure, and healthcare �� are expected to attract the bulk of investor interest. Conversely, tariff-sensitive sectors like manufacturing, consumer goods, and industrials may see PE activity decline sharply until the policy environment stabilizes.

Private equity activity in the Americas and the US in particular is expected to remain focused on middle-market add-ons and bolt-ons to build larger, more scalable platforms as well as continued vertical integration of portfolio companies to create unified, end-to-end offerings.