Key Takeaways
- • Private equity fundraising has declined for four consecutive years, with $906.9 billion raised in the first nine months of 2025—a 53% drop from the $1.7 trillion peak in 2022, according to PitchBook data.
- • Trailing twelve-month fundraising totaled $1.24 trillion, representing a 23% year-over-year decline, with private equity specifically down 32.3% and venture capital down 42.5% over the past 12 months.
- • Secondaries funds bucked the trend, raising $122.6 billion (up 22% year-over-year) and are on track for a record fundraising year in 2025 with $105 billion raised through mid-year, signaling a structural shift toward portfolio management strategies.
- • Accumulated dry powder remains a persistent challenge; while dealmaking has increased, PitchBook analysts note that more robust deal activity will be required to deploy committed but uncalled capital, with sizable exit backlogs continuing to constrain liquidity.
- • Co-investment funds showed resilience with $43.5 billion raised (up 24%), while private credit declined 17% to $218 billion, indicating selective capital allocation within alternative assets.
Summary
Private equity fundraising remains under sustained pressure as the industry enters its fourth consecutive year of contraction. Through the first nine months of 2025, PE firms raised $906.9 billion, reflecting a dramatic 53% decline from the $1.7 trillion milestone achieved in 2022 when the downturn first began. On a trailing twelve-month basis, total fundraising reached $1.24 trillion, down 23% year-over-year, according to PitchBook data cited by senior strategist Hilary Wiek.
The weakness spans multiple asset classes within private markets. Venture capital has been hit hardest, declining 42.5% to $140.4 billion over the past 12 months, while private equity specifically fell 32.3% to $440 billion. Private credit funds, which expanded rapidly during the market dislocation of prior years, declined nearly 17% to $218 billion. The fundraising environment reflects broader challenges stemming from Federal Reserve rate increases that began in 2022, which compressed buyout valuations and limited asset sales at acceptable prices, reducing capital returned to limited partners and subsequently dampening fresh commitments.
A notable exception emerged in secondaries, the traditionally niche strategy for purchasing fund stakes and LP positions. Secondaries raised $122.6 billion (up 22%) and are tracking toward a record year with $105 billion committed through mid-2025, nearly matching the full-year 2024 record. PitchBook analyst Juan Mier emphasized that secondaries have evolved from a distressed-exit mechanism into "a key tool for portfolio management in private capital allocations," reflecting LP appetite for liquidity and portfolio rebalancing.
The persistent drag on capital deployment remains dry powder accumulation. Despite increased dealmaking activity, the industry carries substantial uncalled commitments that require stronger exit momentum to absorb. Kyle Waters, PitchBook analyst, noted that "sizable exit backlogs remain," constraining the velocity at which committed capital can be deployed and raising questions about PE firms' capacity to raise meaningful new funds until portfolio liquidity improves.
The weakness spans multiple asset classes within private markets. Venture capital has been hit hardest, declining 42.5% to $140.4 billion over the past 12 months, while private equity specifically fell 32.3% to $440 billion. Private credit funds, which expanded rapidly during the market dislocation of prior years, declined nearly 17% to $218 billion. The fundraising environment reflects broader challenges stemming from Federal Reserve rate increases that began in 2022, which compressed buyout valuations and limited asset sales at acceptable prices, reducing capital returned to limited partners and subsequently dampening fresh commitments.
A notable exception emerged in secondaries, the traditionally niche strategy for purchasing fund stakes and LP positions. Secondaries raised $122.6 billion (up 22%) and are tracking toward a record year with $105 billion committed through mid-2025, nearly matching the full-year 2024 record. PitchBook analyst Juan Mier emphasized that secondaries have evolved from a distressed-exit mechanism into "a key tool for portfolio management in private capital allocations," reflecting LP appetite for liquidity and portfolio rebalancing.
The persistent drag on capital deployment remains dry powder accumulation. Despite increased dealmaking activity, the industry carries substantial uncalled commitments that require stronger exit momentum to absorb. Kyle Waters, PitchBook analyst, noted that "sizable exit backlogs remain," constraining the velocity at which committed capital can be deployed and raising questions about PE firms' capacity to raise meaningful new funds until portfolio liquidity improves.
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