After three years of dampened dealmaking, we observed early in 2025 that the global private equity (PE) industry was “emerging from the fog.” Now, the fog has finally burned off. Dealmaking returned in 2025 in force: Buyouts surged, exits rebounded, and initial public offerings (IPOs) reemerged.
Indeed, buyout and growth deals larger than $500 million in deal size—a typical barometer for industry health—increased 44 percent to over $1 trillion in value, eclipsing 2021’s total to become the highest year on record for deals of this size. Deal value, when measured across all buyout and growth deal sizes, increased 17 percent. The value of PE-backed exits globally surged as well—up more than 40 percent—aided by a nearly 100 percent increase in PE exit deal volume via IPO. “Megadeals” (that is, transactions larger than $2.5 billion) also returned, reflecting the changed environment of 2025 compared with the recent past. Not only did 2025 see the largest PE deal in history (the announced $55 billion take-private of Electronic Arts by a syndicate of firms), but it also marked the third-highest year ever for take-private activity by either total deal count or value.
Now, with improved visibility, we can more clearly observe how much the private equity terrain has changed. Shifts in deployment, returns, value creation, and traditional fundraising— previously considered to be episodic—are more likely structural features of a maturing industry. Moreover, the rapid innovation and implementation of AI is reshaping industry structures, introducing new competitors, and promising significant productivity increases. The technology offers both investment risks and opportunities (and could significantly change how PE firms themselves operate). The landscape is, therefore, now both more technical and more demanding, even for experienced drivers. Success on the road ahead will depend less on speed than on having the right vehicle—fit for the changed terrain, properly equipped, and driven with discipline.
