IPO exits and tariff turmoil; pension funds overshoot PE allocation targets

S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.

Private equity's exit challenge just got a lot tougher.

Market turmoil prompted by aggressive US tariffs and the increasingly uncertain macroeconomic outlook are spoiling IPO plans and could dull the appetite of large strategics, or sector-focused buyers, for big M&A deals, narrowing the two critical exit pathways for private equity. The industry entered 2025 with high hopes for continued recovery in exit volumes after a few lean years, but it is likely to take some time and more clarity on US tariff policy for a recovery to regain momentum.

It is not all bad news for private equity, which tends to turn moments of volatility to its advantage. Market dislocations produce bargain entry points. Private market fund managers appear eager to deploy their dry powder: March deal value of global private equity- and venture capital-backed deals soared to the highest monthly total in at least a decade.

"Fundamentally, we do better when markets are uncertain and when there is uncertainty in the economy," Apollo Global Management Inc. CEO Marc Rowan said in a previous earnings call.

Read more about how tariffs are clouding the exit outlook for private equity.

⮞ As a group, global pension funds were over their target allocation to private equity in the first quarter, with a median target allocation of $306.8 million and a median actual allocation of $330.3 million, according to an S&P Global Market Intelligence analysis of Preqin data.

⮞ Limited partners could face pressure to rebalance their portfolios if the recent stock market swings lead to a sustained decline in stocks. A shift in the value of a pension fund's public market holdings relative to the value of private equity investments could pave the way for a return of the denominator effect.

⮞ California State Teachers' Retirement System had the largest first-quarter overallocation to private equity at $7.49 billion, above its $46.4 billion target.

TOP DEALS

– KKR & Co. Inc. and Stonepeak Partners LP agreed to buy UK-based healthcare real estate investment trust Assura PLC for 49.4 pence in cash. The transaction is valued at £3.18 billion.

– Sandbrook Capital Management LLC and Public Sector Pension Investment Board agreed to sell Norwegian wind infrastructure company Havfram AS to DEME Group NV in a transaction valued at about €900 million.

– Altus Power Inc.'s stockholders approved the clean electric power company's proposed sale to TPG Global LLC. The deal is expected to close April 16.

TOP FUNDRAISING

– Midmarket private equity firm ONCAP Management Partners LP raised $1.3 billion in commitments at the final close of ONCAP V LP. The fund has completed four investments and is 40% deployed.

– Andros Capital Partners LLC pulled in $1 billion for Andros Energy Capital III LP. The fund focuses on private equity investments, credit opportunities and direct asset-level investments in the energy sector.

– Global Endowment Management LP raised more than $450 million for GEM IS Fund LP and related vehicles. The fund provides equity to independent sponsors in the US.

MIDDLE-MARKET HIGHLIGHTS

– A Paceline Equity Partners LLC affiliate made a $40 million preferred equity investment in mechanical systems company Kassel Mechanical Holdings LLC.

– LongueVue Capital LLC invested in Daedalus Industrial LLC, a control panel and automation company.

– Altus Capital Partners Inc. and Centerfield Capital Partners partnered to acquire manufacturing equipment provider ALM Positioners Inc., alongside the company's senior leadership.

FOCUS ON: PRIVATE EQUITY INVESTMENTS IN EUROPEAN HEALTHCARE

KKR agreed to buy Sweden-based consumer healthcare company Karo Healthcare AB from EQT AB (publ) for about €2.5 billion.

The deal highlights private equity's increased interest in healthcare companies across Europe. In the first quarter, deal value in the sector totaled $4.13 billion, 69% higher than $2.45 billion in the same period in 2024, Market Intelligence data shows.

The median deal value during the quarter was $8 million, compared with $4.8 million in the first three months of 2024.

Other recent deals in the sector include the pending £362 million acquisition of UK-based pharmaceutical company Alliance Pharma PLC by an investment group including Edmond de Rothschild Private Equity Management Ltd., as well as Keensight Capital's proposed £313 million acquisition of British medical device company NIOX Group PLC.

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For further private equity deals, read our latest "In Play" report, which looks at potential private equity-backed M&A, including rumored transactions, each week.

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