Schroders Capital Private Equity Lens Q1 2025
It was a mixed picture for private equity in 2024, with fundraising and transaction numbers falling, while exits stabilised, deal values and returns trended higher, and the secondaries market hit new record highs. These interrelated dynamics indicate promising prospects for 2025.
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The Schroders Capital Private Equity Lens provides a data-driven guide to the global private equity market each quarter, covering fundraising, deal and exit activity, as well as key valuation and performance trends across buyouts, growth and venture capital, and global secondaries.
Key takeaways from the Q1 2025 Private Equity Lens are:
Weaker fundraising environment has led to adjustments in fund targets, while increases in investment and exit activity may support capital raising efforts in 2025. Historically, performance has been stronger during slower fundraising years.
Deal values have been rising amid declining transaction volumes, with stabilising economies and supportive rates expected to spur activity in the year ahead.
Private equity multiples are below public markets, with small and mid-market investments remaining at a steep discount to both large-cap buyouts and small-cap public equities, offering attractive entry points and strong outperformance potential.
Surge in deal size for VC driven by AI companies, especially for later stage investments. Earlier stage venture valuations are lower and have been more stable, and there was positive momentum for early-stage investments in 2024.
Exit activity stabilised in 2024 following strong declines in 2023 and 2022, with alternative liquidity structures, such as continuation vehicles, growing in prominence.
The global secondaries market reached a new record deal volume of $160 billion in 2024. GP-led continuation fund activity has experienced significant growth and also hit a record high last year, with the segment having grown at a CAGR of 32% since 2011.
Quarterly returns for both Buyout and VC/Growth funds are on an upward trajectory, but remained below public market returns in Q3 2024.
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