• 2025 has been characterized by increased market volatility and uncertainty driven by the U.S. administration's announcement of extensive new tariffs. The news triggered a historic public market sell-off across the Dow Jones, S&P 500, and Nasdaq. In response to rising uncertainty, companies pulled back on dealmaking, leading to a notable slowdown in M&A activity.We have seen heightened volatility and uncertainty not previously seen since the COVID-19 pandemic, primarily driven by the U.S. administration's announcement of wide-ranging tariffs. The immediate aftermath of the reciprocal tariffs announced on April 2, 2025, saw the Dow Jones Industrial Average plummet by more than 1,340 points, and the S&P 500 lost 6.65% of its value on April 3 alone, nearly triggering a trading halt. In the two-day period following the announcement, the Dow Jones fell more than 9%; the S&P 500 dropped 10%; and the Nasdaq fell 11%, marking the worst two-day loss in U.S. stock market history. This sharp decline wiped out more than $6.6 trillion in market value, although these major indices have since recovered from those lows. Market turmoil and uncertainty led to a further slowdown in an already softened M&A market. The number of deals announced in Q1 2025 fell 4%, year over year, and 12%, quarter over quarter.1 It is important to note that historically, private equity has generated attractive returns through different economic cycles.

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• In 2024, U.S. private equity activity was significantly higher than the previous year, when deal activity shrunk 16% by count and a whopping 25% in aggregate value. This is a remarkable reversal of fortunes on a year-over-year (YoY) basis when there were concerns about the health and resiliency of the industry. Those concerns have quieted in light of the industry’s strong performance and palpable optimism about a possible surge in deals and exits in the near term. YoY, deal value increased 19.3% from 2023, reaching $838.5 billion, while deal count grew by 12.8% to 8,473, encompassing growth equity transactions, add-on acquisitions and platform buyouts. Just as noteworthy, deal activity, both in terms of the number of deals completed and their aggregate value, also surpassed 2019 levels, which is widely viewed as a watershed year for the industry just before the onset of the global COVID-19 pandemic.

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• Market conditions with Covid19, have caught the attention of traditional PE fund managers due to the dislocation in credit markets and the investment returns they could provide. With dry powder still on the sidelines, PE fund managers are looking closely at how to invest in distressed assets to enhance returns. For fund managers who already have a credit strategy, markdowns of current portfolios are likely; however, these managers are well positioned to identify, execute and operationalize new investment decisions to enhance portfolio returns. 1,384 PE deals closed in Q1 2020 for a combined $186.4 billion—YoY gains of 7.3% and 6.0%, respectively. These figures were boosted by deals that had been negotiated before COVID-19’s effects on the US economy were felt. For example, the largest deal to close in the quarter was announced in May 2019.

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• US PE deal activity topped 5,000 deals and two-thirds of a trillion dollars in 2019. Despite year-end figures falling lightly short of 2018’s mammoth $730.3 billion deal value, we believe the industry remains strong and that a minor YoY dip is not indicative of a pullback in PE dealmaking. PE activity comes in uneven spurts; deal value fell in 2015 before posting a significantly higher sum in 2016. 

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•  At the start of Q3 2018 there was a record 3,037 private equity funds in the US for investors to choose from, targeting an aggregate $948 billion US dollars. 

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•  The dry powder of global private equity companies amounted to over $1 trillion US dollars at the end of 2017 with $961.5 billion to private equity and $145.4 billion allotted to venture capital.  

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• 921 private equity funds reached a final close, securing just over $453 billion US dollars in 2017, the largest amount of capital raised in any year.

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​​* Selected data from Pitchbook quarterly reports