Exit activity of Private Equity (PE) firms accelerated meaningfully in third quarter (Q3) of 2025, reaching a three-year high as firms seize opportunities to turn strategic value creation into realised returns.
“Private equity firms have announced exits totalling $470billion so far this year — a 40 percent increase by value compared with the same period last year,” according to EY in its recent report.
“It’s a welcome development for an industry that has been holding assets longer than anticipated. With more than 30,000 PE-backed companies globally, pressure from limited partners (LPs) for liquidity continues to intensify.
“One year ago, roughly three-quarters of general partners (GPs) rated LP pressure between five and seven on a 10-point scale. Today, the majority rate it between 6 and 8, underscoring that expectations around distributions have only grown stronger,” Pete Witte, EY Global Private Equity Lead Analyst, said in the report titled ‘Private Equity Pulse: key takeaways from Q3 2025’.
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“Private equity is in one of the most exciting times in its history – firms are rethinking everything from the way they source and manage deals, to what it means to create long-term sustainable value,” Witte added.
As exit activity begins to show signs of life, attention naturally shifts to fundraising, where the environment remains more challenging.
Through the first three quarters of 2025, private equity firms have raised approximately $340billion, putting the industry on pace for a roughly 25 percent decline versus last year.
The slowdown reflects both a more measured pace of capital deployment by limited partners and lingering caution around distributions, according to the report, which noted that a promising trend has been the gradual reemergence of the PE-backed IPO market.
After two years of muted activity, Q3 saw a number of high-profile listings come to market, together raising more than $18billion in aggregate proceeds, according to the EY report.
“While modest compared with the pre-2021 boom years, these offerings are meaningful in signalling that public market investors are once again open to new issuance from PE portfolios. Notably, successful debuts have been concentrated in sectors with clear growth narratives and resilient earnings profiles, such as health care and financial infrastructure,” it noted.
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The third quarter of 2025 saw momentum continue to build amid rising sentiment, as private equity firms moved beyond the “cautious optimism” that defined the first half of the year and the transaction market largely shrugged off concerns around potential growth headwinds.
The rebound aligns with improving macro fundamentals — equity markets continued to climb through Q3, inflation moderated across most G20 economies, and expectations for rate cuts in 2026 are firming. Against this backdrop, both sponsors and lenders appear increasingly comfortable underwriting larger, more complex transactions.
Overall, firms announced 156 deals in Q3, and the value of those deals — helped along by the largest announced leveraged buy-out (LBO) of all time – reached an all-time quarterly high of $310billion, as private equity sponsors (and the deal market at large) focused on fewer, larger transactions. Indeed, the quarter saw five PE deals breach the $10billion mark in Q3 — the same as the entire first half of the year.
In third-quarter (Q3) of 2025, the percentage of Private Equity firms expecting exit activity to increase surged from 44 percent to 61 percent, “the highest level recorded since we began tracking GP sentiment more than two years ago. That renewed confidence in liquidity marks a critical turning point, with sponsors more willing to bring assets to market and buyers demonstrating appetite for scaled opportunities,” EY said.