NextWave Private Equity PE Pulse: key takeaways from Q1 2025
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May 1, 2025 In early 2025, private equity firms experienced a surprising 45% increase in deal volume. Despite rising trade tensions causing caution among investors, many are ready to embrace new opportunities. There's a strong focus on improving operational efficiencies within portfolio companies, especially in the aerospace and defense sectors. The resurgence of corporate acquirers has also led to heightened exit activity, highlighting a transformative phase in the private equity landscape amid ongoing uncertainties.
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Q1 2025 Deal Surge Amid Tensions
- Deal volume in Q1 2025 rose by 45% compared to last year amid strong momentum.
- Rising trade tensions are causing increasing market caution and complicating asset valuation.
Exits Strengthen with Corporate Acquirers
- Exit activity increased 15% in number and 60% in value thanks to reengaged corporate acquirers.
- Approximately 40% of portfolio companies have been held over four years, favoring secondary buyers.
Prioritize Portfolio Operations Amid Tariffs
- Focus on operational improvements within portfolio companies rather than add-on acquisitions right now.
- Address supply chain, manufacturing footprint, and tax issues to adapt to tariff impacts.