Key Takeaways
- • Global PE deal value surged 57% in 2025 to US$905 billion, marking the second-most active year on record, as stabilized cost of capital restored buyer-seller pricing alignment and confidence in underwriting metrics.
- • Record 13 mega-deals (US$10b+) closed in 2025, exceeding the prior peak of 12 in 2021 and establishing a new high-water mark, demonstrating sponsor prioritization of larger, higher-conviction transactions over deal volume.
- • Exit market recovered with strategic acquirers driving exit values up more than 50%, signaling renewed M&A appetite from corporate buyers and enabling PE firms to realize gains on long-held portfolio positions.
- • Deal volume increased 15% year-over-year despite selective deal prioritization, with 2025 ranking as the industry's fourth-busiest year historically, underscoring depth of market re-engagement after two years of disciplined pacing.
- • 2026 outlook remains positive with general partners expecting accelerated acquisitions and exits, backed by disciplined underwriting practices and confidence in recent deal quality.
Summary
Private equity entered 2025 with cautious optimism that crystallized into tangible momentum by mid-year, according to EY's Q4 2025 Private Equity Pulse report. After two years of recalibration and measured transaction pacing, the market demonstrated its strongest signals of renewed engagement. Global deal value rose 57% year-over-year while deal volume increased 15%, reflecting a strategic shift wherein sponsors prioritized fewer, larger, and more conviction-driven opportunities over transaction count.
The resurgence was most evident at the upper end of the market. Mega-deals—transactions valued at US$10 billion or more—reached 13 during 2025, surpassing both the 12 announced in 2021 (the prior high-water mark) and the previous peak of 2006. In aggregate, US$905 billion in announced deal value made 2025 the second-most active year on record by value. Although overall deal volumes remained below historical peak levels, the fourth-busiest year on record underscored the depth of sponsor re-engagement across the industry.
Exit markets demonstrated equally robust momentum, with strategic acquirers becoming substantially more active buyers. Exit values increased more than 50% as corporate buyers showed increased flexibility on valuations to facilitate acquisitions of long-held portfolio assets. This recovery in exit activity provided PE firms critical pathways to realize gains and recycle capital into new investments.
The primary catalyst for this market resurgence was stabilization in the cost of capital, which enabled buyers and sellers to realign on pricing expectations. As valuation clarity improved and cost-of-capital uncertainty dissipated, sponsors regained confidence in underwriting assumptions and rigorous scenario analysis, directly translating into increased transaction volumes and deal sizes.
Looking forward to 2026, general partners maintain positive sentiment and expect continued momentum in acquisitions and exits, supported by disciplined underwriting standards and confidence in the quality of deals executed during 2025. This outlook reflects the industry's transition from defensive positioning to offensive capital deployment.
The resurgence was most evident at the upper end of the market. Mega-deals—transactions valued at US$10 billion or more—reached 13 during 2025, surpassing both the 12 announced in 2021 (the prior high-water mark) and the previous peak of 2006. In aggregate, US$905 billion in announced deal value made 2025 the second-most active year on record by value. Although overall deal volumes remained below historical peak levels, the fourth-busiest year on record underscored the depth of sponsor re-engagement across the industry.
Exit markets demonstrated equally robust momentum, with strategic acquirers becoming substantially more active buyers. Exit values increased more than 50% as corporate buyers showed increased flexibility on valuations to facilitate acquisitions of long-held portfolio assets. This recovery in exit activity provided PE firms critical pathways to realize gains and recycle capital into new investments.
The primary catalyst for this market resurgence was stabilization in the cost of capital, which enabled buyers and sellers to realign on pricing expectations. As valuation clarity improved and cost-of-capital uncertainty dissipated, sponsors regained confidence in underwriting assumptions and rigorous scenario analysis, directly translating into increased transaction volumes and deal sizes.
Looking forward to 2026, general partners maintain positive sentiment and expect continued momentum in acquisitions and exits, supported by disciplined underwriting standards and confidence in the quality of deals executed during 2025. This outlook reflects the industry's transition from defensive positioning to offensive capital deployment.
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