USA Trends and Developments Contributed by: Yana M. Mereminsky, Ramya S. Tiller, Erik J. Andrén and Vadim Avdeychik, Debevoise & Plimpton LLP
Debevoise & Plimpton 66 Hudson Boulevard
New York NY 10001 USA
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Overview If there is a single theme dominating the private equity industry in 2025, it is uncertainty, much of which is emanating from unsettled and erratic US economic and trade policy, along with continued geopolitical volatility. In such an environment, it is difficult to make projections, determine value or assess risk. So it is that deal volume is down around the world. Sponsors are finding that fundraising continues to be challeng - ing, while investment managers must contend with ongoing investor demand for distributions amidst challenging exit conditions. The debt market is tepid. But if there is uncertainty, it has a positive tone, as if there is a collective waiting for the dust to settle before shifting the engine into higher gear. Dry powder remains ample. There is notable activity in add-ons and carve-outs, and take-privates appear to be on the rise. The fund finance market is strong, with an expanding lender base offering innovative solutions. Further, the private equity investor pool is poised to expand. So, while the immediate path forward may not be entirely clear, there is broad confidence that the industry and the market are pointed in the right direction. Fundraising After a difficult 2024, many were optimistic that 2025 would bring a boost to private equity exits and fun - draising. Instead, geopolitical uncertainty has stalled those rebounds. Traditional exit opportunities remain challenging, with the resulting lag in distributions creat - ing an obstacle to fundraising. US economic and trade policies and global conflicts are also affecting investor
sentiment, with investors even more cautious about allocating capital. Institutional investors are engaging in increasingly robust due diligence processes prior to committing to a fund, as well as increasingly exten - sive internal procedures for approving allocations. As a result, and consistent with 2024, fundraising periods continue to average approximately 18 months. On the bright side, more private equity funds are hitting and exceeding their targets, showcasing the resiliency of alternatives. In the first half of 2025, approximately 34% of funds exceeded their targets – the highest percentage of the last five years – and the percentage of funds failing to hit their targets reached a five-year low of 29%. Similarly, exits that have made it to the finish line have done so at strong pricing. Compared to the first half of 2024, exit values over the first half of 2025 were up over 69% (even excluding the massive public listing of Venture Global LNG, which was valued at USD58.7 billion). In terms of fundraising totals, buyout funds led the pack with over USD190 billion raised in the first half of 2025. Private credit funds raised over USD146 bil - lion, exceeding H1 totals in 2023 and 2024. While last year’s credit fundraising was heavily skewed towards senior-debt strategies, in 2025, there has been an uptick in distressed and mezzanine debt, as well as dedicated credit secondaries funds. Infrastructure funds saw a huge surge in the first half, raising over USD134 billion – already exceeding the 2024 full-year total for infrastructure funds. Core plus and value add infrastructure strategies have been particularly attrac - tive to investors. Secondaries funds also continue to
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