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Laxman Pai, Opalesque Asia: A study revealed that private equity (PE) investment and deal activity remained relatively steady in the US during Q1'25, with a notable increase from Q4'24.
Investment rose from $210 billion across 2113 deals in Q4'24 to $234 billion across 1670 deals this quarter - reflecting a strong start to the year, according to the Q1'25 Pulse of Private Equity by KPMG
However, momentum in the latter half of the quarter was tempered by rising concerns over newly implemented tariffs on imported goods and the potential for retaliatory counter-tariffs.
Despite these emerging headwinds, several supportive factors - such as ongoing deregulation efforts and lower energy costs - are expected to provide some balance and could help sustain PE investor confidence in the months ahead.
In Q1'25, US private equity funds raised $66.8 billion across 80 deals - a slight dip compared to the same period last year. While overall fundraising was marginally lower, the quarter reinforced a key trend: fund sizes in the US continue to grow, driven primarily by the largest and most established PE firms with a track record of positive returns.
This expansion in fund size has contributed to an uptick in megadeals, as firms seek to deploy record levels of dry powder effectively. However, this cycle of consolidation and scale has made the fundraising environment increasingly difficult for smaller and mid-market players, especially first-time fund managers.
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