Private markets fundraising pulled back last year, and private equity was a particular casualty, with the lowest level raised in the past five years.
Private capital fundraising worldwide was just over US$1.25 trillion, a 13.3% drop from 2024, according to a new report from PitchBook. The decline was more than twice as steep for private equity, with fundraising slumping 31.1% to $413.5 billion. Venture capital fared even worse, plunging 44.3% to $121.8 billion.
Private equity accounted for 32.9% of total private markets fundraising, down from 41.3% in 2024.
Only five of the 17 funds that closed at or above $10 billion last year were primarily private equity funds compared to 11 buyout funds in 2024.
According to the report, “persistently low level of distributions” in private equity and venture capital are a key factor for limited partner (LP) decisions about fund allocations.
PitchBook rightly says that these trends represent a major structural shift in private markets. Private equity is ceding its leading place in private fundraising, both in overall volume and in fund size. Private debt, secondary and infrastructure funds are now among the largest vehicles raised in 2025.
An exception to the overall downtrend in fundraising is evergreen funds, which cover all alternative asset classes. The report says provisional assets under management for such funds was about $493.4 billion last year, up from $411.9 billion in 2024. Direct lending funds represent almost half this figure, but evergreen assets are expected to grow for all asset types in future.
Fundraising for secondaries and co-investment funds was positive, despite the negative background. Secondaries fundraising rose 15.1% to $119.9 billion, and increased 19% to $43.4 billion for co-investment funds.
Private debt, often cited as the new popular asset class among LPs versus private equity, saw a slight 0.7% drop to $234 billion raised.
So where does this leave private assets?
Traditional private equity continues to underperform. Pitchbook cites “a challenged exit market and a resulting weakness in distributions” – down as a percentage of net asset value to 17% in 2025 versus a ten-year average of 26%. LPs consequently have less capital from realisations to roll over into new funds.
Secondaries and co-investment vehicles, meanwhile, have prospered as new methods for LPs to manage their private assets exposure and to try to achieve realisations where primary funds are not delivering. However, they remain beholden to the performance of the underlying primary asset pool.
The report notes that new private equity managers are having an especially hard time as LPs focus on their existing key relationships. This does not bode well for the future of the asset class.
