PARTNER CONTENT
Ambarish Srivastava, Associate Director, Private Markets at Acuity Knowledge Partners, reviews his firm’s latest research on the private markets landscape – evaluating a dynamic 2025 so far and highlighting how firms are stepping up their operational capabilities as a strategic response to market shifts.
What is your overview of deal activity in 2025: How did it track in H1 and what shifts do you anticipate in H2?
Private equity (PE) deal activity improved in 2024 compared to 2023, and this sentiment was expected to continue in 2025. However, PE activity performance was mixed in H1 2025.
Deal activity was strong early this year, as global buyouts continued the 2024 trend, with deal value peaking since Q2 2022, aided by large transactions (such as Sycamore Partners’ USD23.7bn acquisition of Walgreens Boots Alliance).
However, activity slowed in terms of value and count in Q2 2025, due to economic uncertainties stemming from an array of factors including tariff policy announcements, which caused volatility in global capital markets. Nonetheless, in H1 2025, global PE deal value increased 19% y/y to USD386.42bn, driven by mega acquisitions such as Santos (USD23.9bn), Anduril Industries (USD2.5bn) and Makino Milling Machine (USD1.9bn).
The initial shock of ‘Liberation Day’ has abated. Investors view positively US President Donald Trump’s postponement of reciprocal tariffs and recent announcements of deals concluded and in progress. These developments could buoy deal-making throughout the remainder of H2 2025 in the PE space, supplemented by record dry powder, need for liquidity and improving market conditions.
The spotlight will likely be on exits and refreshed value-creation plans, which may prop up growth in the secondaries market. Besides, sectoral shifts may favour artificial intelligence (AI), security, healthcare and domestic businesses, while interest rate cuts are expected to positively impact transactions. Firms are expected to continue with their strategies, such as bolt-on acquisitions and bilateral transactions, to navigate uncertainty, aiming for elevated deal volume and strategic exits.
What key themes or shifts are you observing in the private markets landscape this year – from fundraising dynamics to investor expectations and portfolio strategies?
This year, private markets are experiencing significant shifts in fundraising, investor expectations and portfolio strategies. Fundraising optimism (with 86% of respondents in our 2025 annual survey expecting an increase in fundraising) is the highest in the past four years, driven by rate cut hopes, partially dampened by the geopolitical conflicts and no rate reductions so far in 2025. Defying the ongoing economic uncertainty and challenges posed by the Trump administration’s policies and global conflicts, deal activity ramped up year-on-year in H1 2025.
Investment opportunities are growing, but so is competition. In our survey, 77% of respondents anticipated competition for opportunities to intensify in 2025. This, coupled with high valuations, makes fundraising challenging, calling for professionals to dedicate around 30% of their time to origination. Technology remains a favoured sector for PE, venture capital and infrastructure firms, while buyout firms are increasingly targeting financial services. For infrastructure strategies, renewable energy and energy transition are global favourites, except for North American private market firms, which have adopted a more cautious approach. This is, in part, attributable to the current US administration’s policies, which threaten to erode the profitability of energy transition businesses. However, PE firms at the end of their 5–7-year investment cycle may see this depression in valuations as a short-term dip and a buying opportunity to realise alpha in the medium term.
Operationally, fund accounting and portfolio monitoring still consume a significant portion of professionals’ time, with Excel-based portfolio monitoring still dominant, despite the increasing adoption of specialised tools. While the acceptance of these portfolio monitoring tools (including FolioSure) has risen to 81% in 2025, data management, coordination and manual efforts remain challenges.
Regionally, emerging market firms are more inclined to invest in technology. Only 56% of North American respondents expressed an interest in digital technologies (compared to 70% in Asia-Pacific and Africa and 89% in South America).
With a specific focus on deal origination, what key developments are you observing across strategies, sectors or regions?
Strategic developments
The mix of market volatility, geopolitics and regulatory burden has forced private market professionals to alter their operating model. Currently, they rely more on outsourced services than in-house solutions. Nearly 90% of respondents in our survey said they remain open to retaining external support, often for functions kept internal earlier. This desire (and the need) to partner with external service providers has prompted private market firms to develop a new set of skills to evaluate and retain external providers while ensuring they meet in-house compliance and quality standards.
Sectoral dynamics
PE and venture capital firms continue to prioritise the digital technology and financial services sectors, as indicated by more than 50% of respondents. Within the technology sector, AI and machine learning remain the most prominent categories. Infrastructure firms are also increasingly focusing on digital infrastructure. And despite the allure of technology, many PE firms are also maintaining a strategic focus on traditional sectors such as consumer, media & telecom, healthcare & pharmaceuticals, and financial services, deriving significant value from these areas.
Regional trends
Nowadays, organisations are increasingly on the lookout for bandwidth expansion through external assistance. Despite the global trend towards embracing high-quality external support, regional differences exist. For example, 100% of respondents in the Middle East were open to tendering for external support – vs 67% in Asia.
As private equity fund managers navigate rising complexity across the investment lifecycle, what capabilities or support models are proving most effective in helping them scale with confidence?
External service providers have evolved to support the PE industry across the investment life cycle. Deal sourcing services include advanced market intelligence and sector analysis, aiding in spotting potential investment opportunities by tracking industry trends and competitive landscapes.
Third parties leverage proprietary databases and sophisticated analytical tools for precise target identification. During due diligence, they deliver detailed financial analysis, including performance review, financial modelling and valuation assessment along with comprehensive risk assessment and background checks while complying with standards.
For deal closing, external partners support through transaction documentation, negotiation strategies and post-transaction integration planning, ensuring seamless integration of the assets acquired. By leveraging these evolved outsourcing services, PE firms can enhance their capabilities and scale operations with greater confidence and efficiency. Acuity Knowledge Partners stands out as the largest provider of these specialised services, offering extensive expertise and resources to the industry.
Technological integration
Acuity Knowledge Partners is well-positioned to support financial firms thanks to Agent Fleet – its proprietary Agentic AI software, which offers bespoke solutions. Acuity’s expertise and innovative solutions are driving significant advancements in deal origination, helping firms successfully steer through an evolving course with greater efficiency and confidence.
Ambarish Srivastava, Associate Director, Private Markets, Acuity Konledge Partners – Ambarish has about 19 years of experience in business research, analysis and consulting. He is engaged in leading deep-dive strategic projects, due-diligence support, issue-focused trend analysis and similar assignments for our Private Markets clients. His previous experience includes tenures with startups, the Big Four and consulting organisations, where he focused on industry studies, price forecasting, company analysis, macroeconomic studies and other strategic engagements.
