Private equity returned fewer profits to investors for a fourth consecutive year in 2025, as the industry grappled with $3.8tn of unsold assets, according to a report by Bloomberg citing management consultancy Bain & Company.
Distributions as a share of net asset value stood at 14%, the second-lowest level since the global financial crisis, with the duration of the slowdown now exceeding that experienced in 2008.
Deal value rebounded in 2025, rising 44% year-on-year to $904bn, supported by large transactions including the $56.6bn deal for Electronic Arts. However, total deal volumes fell 6% to 3,018, doing little to alleviate the industry’s growing stockpile of dry powder.
Fundraising continued to feel the strain, declining 16% to $395bn in 2025, marking the fourth straight annual fall. Investors are also increasingly targeting net internal rates of return above 20%. Bain noted that managers now need to drive significantly higher earnings growth to meet return expectations, while holding periods have stretched to around seven years on average, up from five to six years in 2021, weighing on portfolio-level returns.
