Private equity firms are finally selling assets that have been stuck on balance sheets for years, but the price they’re getting is turning heads in the financial world.
Global data shows the number of private equity exits - when investors sell a company either to another buyer or through a listing - climbed around 5% last year to roughly 3,150 transactions.
However, the total value of those sales tumbled more than 20% to about US$412 billion, close to the bottom of the range seen over the past several years and well off peak levels.
The shift towards greater deal activity but with less money is the clearest sign yet that the industry’s long wait for a market rebound has been a painful reality check.
After markets plunged in 2022 and interest rates rose sharply, private equity firms held on to assets rather than selling at prices buyers would accept.
This left a backlog of older investments - literally tens of thousands of companies - that have aged beyond the point where firms and would-be buyers see eye to eye on price.
Notes from economic research show that many funds avoided writing down the value of those assets, widening the gap between sellers and buyers.
The pressure from this freeze has rippled out to the investors who put money into private equity funds, known as limited partners (LPs).
When firms don’t sell companies at good prices, LPs don’t get cash back, which makes them cautious about committing new capital.
Unsurprisingly, fundraising by private equity dropped again in 2025, marking a second straight year of decline.
Dealmakers are also being picky on new investments.
In the U.S., the total dollar value of deals rose in the first half of the year; however, the number of deals stayed flat.
While the market is witnessing bigger deals getting over the line, a lot of smaller transactions are simply being overlooked.
Even as smaller exits struggle, the very largest players are finding opportunities in the cracks.
Blackstone, one of the industry’s giants, reported nearly $11 billion in sale proceeds from portfolio companies in the fourth quarter - its richest quarter of the year.
That included the blockbuster listing of Medline, a medical supplies group that raised more than $7 billion in an upsized offer, the biggest initial public offering (IPO) ever by a private equity-owned company in the U.S.
The ability of big funds to do well while most of the industry struggles simply reflects broader inequality within private markets.
Large, well-connected firms are better able to weather volatility and execute complex exits, while smaller players face tight returns and longer holding periods before any real payoff arrives.
The U.S. government under Donald Trump hasn’t helped.
Since 2024, sweeping tariffs and erratic trade policy have clouded corporate confidence and complicated cross-border deals, adding yet another layer of uncertainty to a market already squeezed by higher borrowing costs.
These macro headwinds have discouraged buyers, suppressed valuations, and extended the mismatches between sellers and buyers in private equity.
In a parallel development that underpins how private capital flows have shifted, the largest leveraged buyout - a type of deal where a company is bought using significant borrowed money - hit fresh highs.
Electronic Arts (EA), the California-based video game maker behind titles such as Madden NFL and The Sims, agreed to be taken private in a consortium-led deal valued at around $55 billion.
That deal, backed by the Saudi Arabia Public Investment Fund (PIF), Silver Lake and Affinity Partners, represents the largest all-cash sponsor takeover on record and highlights how sovereign wealth and private investors are outbidding traditional Wall Street sponsors for marquee assets.
That sale of EA highlights another trend: private equity’s evolution from a purely financial engineering game into a strategic battleground where deep pockets and geopolitical players increasingly shape outcomes.
It also raises questions about national ownership of once-public American companies, particularly as influence from state-linked funds expands.
