- Deal momentum strengthened as narrowing valuation gaps and improved financing conditions supported record deployment
- Exit activity rose 40% year on year, aided by stronger IPO markets
- Fundraising remained soft, but emerging retail channels and new US 401(k) access point to potential long-term tailwinds
Global private equity (PE) deal activity reached record levels in Q3 2025, with total deal value rising to US$310b, as firms took advantage of narrowing valuation gaps, improved financing conditions and renewed market confidence.
While fundraising remains muted, emerging retail channels and a gradual reopening of IPO markets signal growing momentum across the sector, according to the latest EY Private Equity Pulse Q3 2025.
Record deployment driven by improved sentiment
The third quarter of 2025 marked a significant shift in sentiment for private equity. Rising equity markets, moderating inflation and expectations of rate cuts in 2026 have supported a more constructive dealmaking environment.
In total, 156 deals were announced in Q3, with six transactions exceeding US$10b. Large-scale acquisitions, including the largest LBO of all-time, drove the highest quarterly total on record, underscoring growing appetite for scale and complexity among sponsors.
Peter Witte, EY Global Private Equity Analyst Lead, says:
“Private equity entered the second half of 2025 with renewed conviction. As valuation gaps narrow and financing conditions improve, sponsors are acting decisively, leaning into transformational transactions that balance optimism with discipline. The rebound we are seeing is not just cyclical; it reflects a structural recalibration of confidence across the industry.”
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