Key Takeaways
- • Global private equity fundraising declined 11.0% to $490.81 billion in 2025, marking the second consecutive year of decline and continuing a multiyear slowdown in capital deployment across buyout, growth, secondaries, GP stakes, and diversified strategies.
- • Take-private deal activity has cooled as PE firms face persistent headwinds from economic uncertainty and a prolonged "distribution drought," though early signs of recovery are emerging with increased M&A activity and rising exit momentum gaining traction.
- • Venture capital fundraising fell below $100 billion for the first time since 2015, with only $86.7 billion raised as of November 30, 2025, despite a record 7,598 VC funds launched—signaling structural challenges in LP distributions offsetting fundraising momentum.
- • Institutional investors are approaching the market with "cautious optimism" as the worst of PE's distribution constraints ease, with Cambridge Associates noting that recovery conditions are improving and 2028 projections suggest fundraising may return to 2021 peak levels in dollar value.
- • The number of PE funds launched in 2025 fell to 364 from 392 in 2024, reflecting capital scarcity and selective fundraising, while recent IPO upticks provide early signals for improved exit activity and potential LP capital returns.
Summary
Private equity fundraising continued its downward trajectory in 2025, declining 11.0% year-over-year to $490.81 billion across core strategies including buyout, growth equity, secondaries, general partner stakes, and diversified funds, according to data from With Intelligence, part of S&P Global Market Intelligence. This decline marks the second consecutive year of contraction, following a broader multiyear slowdown that has pressured the industry since 2021 when fundraising peaked at $934 billion. The 2025 total of $490.81 billion represents a significant retreat from 2024's $551.16 billion, underscoring persistent capital constraints and LP distribution challenges that continue to weigh on fundraising velocity.
Take-private deal activity and broader M&A momentum have cooled amid lingering economic uncertainty, though early indicators suggest a recovery is taking shape. While deal activity rebounded in 2024 driven by rising valuations, the subsequent slowdown in fundraising and distributions has tempered new investment capacity. However, institutional investors are increasingly approaching the market with cautious optimism as "the worst of the distribution drought of the private equity industry is behind us," according to Josh Zweig, co-head of North American private equity research at Cambridge Associates. Recent increases in IPO activity have provided hopeful signals for improved exit conditions, which should unlock greater LP capital returns and support renewed fundraising cycles.
Venture capital faces even more acute challenges, with global VC fundraising falling below $100 billion for the first time since 2015, reaching only $86.7 billion as of November 30, 2025, based on Preqin data. Despite this severe contraction, the number of VC funds launched reached a record 7,598 in 2025, reflecting both persistent entrepreneurial interest and fragmentation across smaller fund sizes. According to Conor Moore, global head of KPMG private enterprise, venture capital fundraising remained "extremely muted," but improving IPO activity offers potential momentum for exits and downstream capital replenishment.
Looking forward, analyst consensus suggests recovery is materializing. Preqin analysis projects private equity fundraising will return to 2021 peak levels by 2028 in dollar value terms, contingent on sustained improvements in LP distributions and exit activity. The stabilization of distribution flows, combined with rising valuations and renewed M&A traction, is expected to support renewed capital commitments across both PE and VC in the near to medium term. Institutional LP sentiment has shifted from distressed positioning toward measured confidence that the sector's structural challenges are resolving.
Take-private deal activity and broader M&A momentum have cooled amid lingering economic uncertainty, though early indicators suggest a recovery is taking shape. While deal activity rebounded in 2024 driven by rising valuations, the subsequent slowdown in fundraising and distributions has tempered new investment capacity. However, institutional investors are increasingly approaching the market with cautious optimism as "the worst of the distribution drought of the private equity industry is behind us," according to Josh Zweig, co-head of North American private equity research at Cambridge Associates. Recent increases in IPO activity have provided hopeful signals for improved exit conditions, which should unlock greater LP capital returns and support renewed fundraising cycles.
Venture capital faces even more acute challenges, with global VC fundraising falling below $100 billion for the first time since 2015, reaching only $86.7 billion as of November 30, 2025, based on Preqin data. Despite this severe contraction, the number of VC funds launched reached a record 7,598 in 2025, reflecting both persistent entrepreneurial interest and fragmentation across smaller fund sizes. According to Conor Moore, global head of KPMG private enterprise, venture capital fundraising remained "extremely muted," but improving IPO activity offers potential momentum for exits and downstream capital replenishment.
Looking forward, analyst consensus suggests recovery is materializing. Preqin analysis projects private equity fundraising will return to 2021 peak levels by 2028 in dollar value terms, contingent on sustained improvements in LP distributions and exit activity. The stabilization of distribution flows, combined with rising valuations and renewed M&A traction, is expected to support renewed capital commitments across both PE and VC in the near to medium term. Institutional LP sentiment has shifted from distressed positioning toward measured confidence that the sector's structural challenges are resolving.
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