Inside the Strategy Room

241. The path forward for private equity

Mar 6, 2025

In this enlightening discussion, Alex Edlich, a senior partner at McKinsey specializing in private equity, and Christopher Croke, a partner leading the Private Capital Practice in London, unpack the latest trends in the private equity landscape. They highlight a rebound in dealmaking and strategies for value creation amid changing market dynamics and rising interest rates. The duo also explores the resilience of mid-market funds, innovative investment strategies, and the shifts in industry metrics, emphasizing a cautious but optimistic outlook for 2024.

46:03

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Episode guests

Christopher Croke

Alex Edlich

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Quick takeaways

In 2024, private equity exhibited resilience with a 14% rebound in transaction values, particularly in larger buyouts across North America and Europe.

Amidst fundraising challenges, innovative strategies like separately managed accounts are attracting capital, reflecting limited partners' renewed confidence in private equity's long-term potential.

Deep dives

Emerging Resilience in Private Equity

The private equity industry is showing signs of resilience as it begins to emerge from the challenging years of 2022 and 2023. A notable rebound in transaction values was observed in 2024, with a 14% increase overall, marking it as the third most active year on record. Larger buyouts experienced particularly strong growth, and despite a decline in the number of transactions, significant recovery in value was evident, especially in North America and Europe, highlighting an adaptive market responding positively to changing conditions. Additionally, the exit backlog reached unprecedented levels, suggesting a future readiness by firms to navigate upcoming liquidity challenges.

Intro

4min

Trends in Private Equity Dealmaking

13min

Adapting to a New Interest Rate Landscape in Private Equity

16min

Innovative Resilience in Private Equity Investment Strategies

2min

Shifts in Private Equity Dynamics

10min

Concluding Insights and Resources on Private Capital

2min

Despite persistent uncertainty in global markets, 2024 was the year that private equity began to emerge from a multi-year fog, with a rebound in dealmaking and distributions. Our Global Private Markets Report for 2025 revealed an industry that is more resilient, more innovative, and perhaps stronger than before. To discuss the nuances of that report we are joined by two of the report’s authors, Alex Edlich and Christopher Croke.

Alex is a senior partner in our New York office where he helps private equity and financial services clients achieve superior performance, by driving innovation with new technology. He is a senior leader in our Financial Services, Private Capital, and Digital Practices. Christopher Croke is a partner in our London office, where he is a leader in our Private Capital Practice. He advises private equity firms on their investments and strategy and helps the companies they own with their strategy and value creation.

Related insights

Global Private Markets Report 2025: Private equity emerging from the fog

Insights on Private Capital

Deal Volume Podcast

CEO alpha: A new approach to generating private equity outperformance

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