Mergers and acquisitions analysts are already anticipating that 2025 and beyond could be a “golden age” for dealmaking, thanks to a mix of regulatory changes under Trump and broader economic trade winds that spell good things ahead for the M&A landscape. But the year we’re leaving behind was a pretty solid one for private equity, too, according to newly-released data from PitchBook.
According to the research firm’s new Private Equity First Look report, 2024 saw U.S. PE leap upward in terms of both the number and value of deals, with $838.5 billion in total deal value and 8,473 in total deal count–a marked increase from 2023, which saw 7,515 deals worth $703 billion.
Of the 2024 U.S. PE deals that PitchBook looked at, the bulk were LBOs and other buyouts–about 79%–while the remaining 21% were growth or expansion capital investments.
PE exits are also on the rise, from 1,287 in 2023 to 1,502 in 2024, and with total exit values leaping from $277.3 billion to $416.7 billion over that same time.
“2024 marked a year of recovery for the PE market,” PitchBook wrote in the intro to its report, published Thursday. “The value of global PE exits in 2024 jumped nearly 20% from the prior year. The US led the way with a remarkable 50% YoY increase.”
It’s a generally positive indication for the year to come, buoying predictions that the PE market is starting to leave the multi-year slump it’s been stuck in. Those economic indicators, plus anticipation that Trump will be a light-touch antitrust enforcer and the ongoing series of Fed rate cuts, have left many analysts enthusiastic about the year ahead.
“Lower interest rates and tighter credit spreads helped lower financing costs for buyouts and narrowed the gap in value expectations between buyers and sellers,” PitchBook explains.
Still, not every indicator is positive. The PitchBook report indicates that American private equity fundraising fell off in 2024, with the amount of capital raised dropping by over $100 billion year over year, from $394.8 billion in 2023 to $287.3 billion in 2024. And so, too, did fund count fall–by over half, from 685 to 316.
“We believe … PE fundraising will finally give way in 2025, leading to the first significant decline in five years,” reads a different PitchBook report–the agency’s 2025 US Private Equity Outlook, published in mid-December. “A variety of factors are at work to drive this decline, and while none are new, their cumulative effects are just too great to sustain another stable year of fundraising.”
Among those factors, it continues, are a rise in the time it takes to close a private equity fund, resulting in fewer funds closing and thus less capital being raised. Also indicating a problem is the decline in dry powder–uninvested capital–as deal activity outpaces fundraising.
Despite the year-over-year increase in both deal values and deal volume, both remain below the peak in 2021, when values were $1.2 trillion and volume was 9,830.
Source: inc.com