Private equity exits fall to 2-year low in Q1 2025

Global private equity exit activity slumped to its lowest level in two years in the first quarter of 2025 as tariff-related uncertainty rattled markets.

Private equity firms recorded 473 exits from portfolio company investments totaling $80.81 billion in the first three months of 2025, according to an S&P Global Market Intelligence analysis of Preqin Pro data. Both figures represent the lowest quarterly totals since the first quarter of 2023.

The private equity exit picture now looks very different from what it did at the end of 2024, when the annual exit volume increased by over 5%.

Fund managers who entered the year optimistic about an uptick in divestments are facing new and unexpected headwinds as buyer and seller views on value diverge, said Jeremy Swan, a managing partner at CohnReznick who works in the advisory's financial sponsors and financial services industry group.

"The volume of deals in process is very strong. It's just that these deals aren't closing. They're moving slowly. Buyers are being cautious," Swan said.

Activity on pause

An increase in exits would ease some of the pressure on buyout fund managers to harvest investments and send more capital back to their limited partners, who saw distributions slow to a trickle in recent years.

"There's still that dire need to make sure they're returning capital to their [limited partners]," Swan said, noting that lower levels of distributions have hampered private equity fundraising.

Private equity firms planning to launch new private equity funds this year are more likely to kick the can down the road, said Jared Davidson, a managing director at placement firm Asante Capital.

"Not stopping, but taking a pause," Davidson said, adding that he was aware of soon-to-launch fundraising campaigns put on hold for at least a month or two.

Largest deals

Haitong Securities Co. Ltd., a brokerage backed by Shanghai Guosheng Group Co., Ltd., China CITIC Financial Asset Management Co. Ltd. and Qilu Zhongtai Private Equity Fund Co. Ltd., was the target of the largest private equity exit completed in the first quarter. Haitong merged with a competitor to form Guotai Haitong Securities Co. Ltd. in a deal valued at $18.08 billion.

The second-largest exit completed in the first quarter was the $14.5 billion deal that reorganized the ownership structure of international school operator Nord Anglia Education Limited. The sellers — Canada Pension Plan Investment Board and EQT Private Capital Asia — both reinvested in the business.

Finding a way

Market jitters mean the IPO window is likely shut to private equity firms for at least the next 60 to 90 days, said Keith Campbell, leader of consulting firm West Monroe's M&A practice.

It was just barely open to begin with. The 18 private equity-backed IPOs recorded globally in the first quarter was the lowest quarterly total in at least five years, according to an S&P Global Market Intelligence analysis of Preqin Pro data.

– Download a file of raw data from this story. – Catch up on the surge in private equity deal value in March. – Check out the latest private equity headlines.

But Campbell's outlook for private equity exit activity was not uniformly dire. Outside of sectors with long supply chains and high tariff exposures, such as consumer and industrial, the urgency for fund managers to produce exits and maintain fundraising momentum remain tailwinds for portfolio company sales to strategic acquirers and other financial sponsors.

"I personally see a lot of activity happening, at least under our purview, in sectors that aren't necessarily as impacted [by tariffs]," Campbell said.