Data provider Preqin’s global private equity report heralds a cautious recovery for the asset class in the year ahead, but with some caveats.
According to the report, 856 private equity funds raised US$507 billion in the first nine months of 2025, almost three-quarters of the figure for all of 2024, while deal value was around $470 billion, 18% below last year’s total. Both figures suggest the full-year tally in 2025 will be similar to last year.
Meanwhile, exit value in the nine months to September was $304 billion, 70% of the 2024 total.
According to Victoria Chernykh, Preqin’s vice president for private equity, the asset class will recover going forward driven by three factors: lower interest rates; reduced valuation mismatch between buyers and sellers; and investors shifting from public to private allocations.
The report also details greater concentration in both fund performance and deal size. Net internal rates of return for top-quartile funds from the 2020-22 vintages are better than previous vintages, while bottom-quartile funds sometimes approach zero. Limited parters are correspondingly being more selective.
Dealmaking in 2025, meanwhile, was characterised by fewer but larger deals.
Preqin expects Asia Pacific private equity to perform far better in 2024-2030 than in the 2021-2024 period. It forecasts average IRRs for Asia Pacific buyouts to rise to around 12%-13% from about 6%, and to around 11% from 0% or worse for growth funds.
Other key findings include stronger secondaries fundraising. Also, although most LPs remain committed, Preqin’s survey last month showed that 12% of them plan to reduce allocations to private equity, double from a year ago.
The trends suggest that private equity is still facing challenges returning money to investors. Significantly, the report notes that average management fees for the 2025 vintage and currently raising funds have dropped to a record low 1.61%. It appears that private equity managers are working for less to prove their value to investors.
Private equity performance actually lagged public markets in the 12 months to June 2025, according to Preqin. No wonder around one-third of LPs surveyed were dissatisfied with the performance of their private equity investments.
Preqin does forecast private equity assets to grow from roughly $6 trillion this year to around $11.8 trillion out of a total of around $30 trillion for alternatives overall by 2030. However, with lower fees, more selective LPs, and potential retail access, the asset class is likely to look very different.
