“We expect the 2025 US private equity market to be more active than in 2023 and 2024, driven in part by the need to deploy pent-up capital and show returns on previous investments.
While a decrease in US interest rates is unlikely, the anticipated relaxed regulatory stance from President Trump’s administration is expected to positively impact the deals market.
However, new trade tariffs may complicate or delay deals, primarily impacting businesses with a presence in multiple geographies. They may lead to inflation, which can put pressure on rates and complicate supply chains. Such an environment may drive investments towards service-based rather than manufacturing businesses.
Despite this, there is still pressure to move forward with exits and realise capital. This is particularly the case for PE funds that invested when borrowing costs were low and multiples were high. Many have chosen to delay exits until the economic environment is more favourable.
On balance, there is generally optimistic sentiment around PE markets driven by the level of dry powder, changing political landscape and the need to exit and show returns, all of which should contribute to a more robust market in 2025.”
Greg Westfall, National Managing Private Equity Principal, Grant Thornton US
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