NextWave Private Equity PE Pulse: key takeaways from Q3 2025
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Oct 23, 2025 In Q3 2025, private equity activity skyrocketed, achieving a record US$310 billion in deal value. With 156 announced transactions, the focus has shifted towards larger deals, including a significant LBO. Narrowing valuation gaps and innovative deal structures are driving this momentum. Key sector investments are seen in infrastructure and healthcare. A bullish outlook is emerging as 61% of firms anticipate increased exit activity, amidst rising pressure for successful exits and the potential for substantial retail 401(k) inflows.
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Record Q3 Deal Surge
- Private equity activity surged to $310b in Q3 with 156 deals, driven by narrowing valuation gaps and market confidence.
- Sponsors are pursuing larger, transformational deals as financing conditions improve and risk appetite returns.
Surprised By Rapid Market Recovery
- Pete Witte reflects surprise that the market produced the largest announced LBO and broad deal momentum despite earlier uncertainty.
- He notes record public markets, moderating inflation, and stabilized rates as contributors to a risk-on stance.
Valuation Gap Is Closing
- Two-thirds of GPs say the valuation gap has narrowed, enabling more deal activity and buyer-seller convergence on pricing.
- Firms are using deal structures like earnouts and MAC clauses to allocate tariff and macro risk.