A global private equity (PE) revival is taking shape as dealmaking gains traction, though sluggish fundraising continues to present challenges, according to Bain & Company’s 16th annual Global PE Report. The report highlights a resurgence in both buyout investments and exits, reversing the sharp declines of the previous two years.
Private equity investment values surged 37% year-on-year to $602 billion in 2024, excluding add-on deals, fueled by pent-up demand from general partners (GPs) eager to deploy aging dry powder and an improving economic environment as central banks reduced interest rates. Exit activity also rebounded, with global exit value climbing 34% to $468 billion and exit counts increasing 22% to 1,470. This shift marked a welcome thaw in a previously stagnant exit market that had constrained liquidity and delayed capital returns to limited partners (LPs). However, the industry still faces macroeconomic uncertainties that could impact sustained momentum in 2025.
“2024 can be considered the year of the partial exhale. Whether the renewed impetus in 2024 can build will depend on how policy unfolds,” said Hugh MacArthur, chairman of Bain’s Global Private Equity Practice. “We think the headwinds that have held back activity since mid-2022 should continue to dissipate. The industry is anxious to make deals, GPs are finding creative ways to boost liquidity, more dollars should flow in from sovereign wealth funds and private wealth and returns remain strong. But deal appetite is still tempered by the uncertainties keeping markets on edge. Investors are looking for clarity to break through the policy clouds on the economy, trade, regulation, and geopolitics.”
Bain’s report underscores that while dealmaking has picked up, the private equity landscape is undergoing significant structural changes that will shape competition for investment opportunities and capital. Rising costs to generate market-beating returns, heightened fee pressure, and fierce competition for deals are among the key challenges. Despite these hurdles, the industry has demonstrated resilience and adaptability, positioning itself for future growth as economic conditions evolve.
“Generating alpha has never been more challenging. Strong performance is getting harder, not easier. An emerging upturn will inevitably present important opportunities for investors. But the winners will be those funds that demonstrate a consistent, differentiated model for value creation – and clear strategies for maintaining growth and performance for the long term,” said Rebecca Burack, head of Bain’s Global Private Equity Practice. “The surest way to land in the winner’s circle is to articulate your ambition clearly and develop a practical strategy for how you plan to compete in the years ahead.”
Take-private transactions dominated the high end of the PE market, rising to $250 billion globally in 2024 and accounting for nearly half of deals over $5 billion in North America. The technology sector remained a primary focus for private equity, comprising 33% of buyout deals by value and 26% by volume, with strong activity also seen at the intersection of technology and healthcare. Financial services deal value surged 92% year-on-year, while industrials saw an 81% increase.
The rebound in exits in 2024 provided further optimism, with a 141% surge in sponsor-to-sponsor transactions totaling $181 billion, driven by a 48% increase in deal size. Strategic sales to corporate buyers remained flat, while initial public offering (IPO) activity continued to lag, making up only 6% of exit value. Despite this progress, the exit environment remains a key impediment to strong returns, with distributions as a proportion of private equity’s net asset value sinking to 11%—the lowest level in a decade, down from an average of 29% between 2014 and 2017.
The fundraising environment remained challenging, declining for the third consecutive year in 2024. Private asset fundraising fell 24% year-on-year and is now down 40% from its all-time peak of $1.8 trillion in 2021. The number of funds closed dropped 28% to 3,000, significantly below pre-pandemic levels. LPs have become increasingly discerning, directing capital toward the largest and most experienced funds with proven track records, while smaller and lower-performing funds struggle to meet targets.
Bain also highlighted the evolving role of artificial intelligence (AI) in private equity, with firms aggressively investing in AI capabilities to drive portfolio performance. “With AI evolving at a breakneck pace, Bain cautions that it is not a panacea, nor is there a ‘one-size-fits-all’ approach. But it concludes that learning by doing is the key to harnessing AI’s potential to drive operational efficiencies and enhanced revenues in PE firms and within their portfolios,” the report states.
As private equity firms navigate a competitive and shifting landscape, Bain’s report concludes that those poised to succeed will need to define clear competitive advantages and long-term strategies. With rising costs, regulatory shifts, and evolving investor expectations, firms must take a proactive approach to differentiate themselves and position for sustained growth in the years ahead.
Click HERE to access Bain & Company’s Global Private Equity Report 2025.
© 2025 Private Equity Professional | March 4, 2025
