Private equity confidence remains high despite global volatility

• Market volatility reported as the biggest challenge to business performance.
• North American and Asia Pacific confidence in deal making and performance remains high while Europe is more cautious.
• Financial services (51%) and technology & telecommunications (47%) replace ESG and cyber security as top private equity investment sectors.

Despite global volatility and concerns around market fluctuations, interest rates and emerging technologies like AI, the report finds that confidence in the future of the market remains high with industry professionals, especially those in North America and Asia Pacific.

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Partner & Head of Private Equity at Forvis Mazars Group, Matthieu Boyé, commented on these latest findings: “After a difficult year with strong competition to invest in the best performing companies, PE firms are building resilience and are focused on accelerating growth of their portfolios. By taking advantage of trends and promising long-term performance in certain sectors and geographies, along with implementing digital and sustainable strategies, firms are generating better returns for investors and extending the holding period of their portfolio companies.”

Capturing insights from over 300 PE professionals, asset managers and family offices across North America, Europe, Asia Pacific, Africa and Latin America, this year’s report also finds:

• Financial services and technology & telecommunications stand out as the top investment areas this year but interestingly, investors are targeting sub-sectors and specific business models of these two industries to ensure resilience during economic uncertainty.
• Cyclical businesses and those dependent on volatile supply chains are currently less attractive for investment by private equity firms.
• There’s an increased focus on mid-market funds and deals with 46% of respondents preferring <$100m portfolio company size.
• Market volatility is the biggest challenge impacting performance as market evolutions have influenced both short-term gains and long-term investing strategies.
• According to 60% of respondents, interest rates and inflation have impacted PE over the past year and continue to be a key concern moving into 2025.
• Geopolitical unease (45%) was also reported as a major performance challenge.

PE firms are adopting a more measured outlook for 2025. A change from their cautious optimism going into 2024, which became a relatively flat year in most markets. Ongoing uncertainty in the global economy, particularly as the market grapples with volatility, rising interest rates and inflationary pressures, continue to influence this sector.

Regions like North America and Asia Pacific reported a slightly different view. Confidence in deal activity and portfolio performance remains high. The change in outlook across Europe, by comparison, is understandably more reserved as firms continue to grapple with economic headwinds like regulatory risk and increasing geopolitical instability.

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“The present market environment has resulted in heightened volatility, higher interest rates, and economic uncertainty, all of which have had a detrimental influence on portfolio valuations and exit possibilities. Operational issues for portfolio firms have also increased, making active management critical.”

PE Managing Partner in Australia

“High inflation has destroyed purchasing power, lowering returns, particularly in portfolios containing low-growth or fixed income assets.”

PE Managing Partner in South Africa

“Geopolitical uncertainty is limiting the levers of regional integration and requires us to manage the exchange rate risk.”

PE Director/Principal in France

About the study

Forvis Mazars’ private equity report 2025 summarises findings from the firm’s global survey, featuring insights from over 300 respondents across North America, Europe, Asia Pacific, Africa, and Latin America. Content is based on primary market research, including interviews with private equity clients and industry experts, as well as reputable secondary data sources.

About Forvis Mazars

Forvis Mazars Group SC is an independent member of Forvis Mazars Global, a leading professional services network. Operating as an internationally integrated partnership in over 100 countries and territories, Forvis Mazars Group specialises in audit, tax and advisory services. The partnership draws on the expertise and cultural understanding of over 40,000 professionals across the globe to assist clients of all sizes at every stage in their development.

Visit forvismazars.com to learn more.

Contacts

Heather McMaster, Group Head of PR and Content, Forvis Mazars 
Heather.McMaster@mazars.co.uk

Rosa Mejia Banks, Group PR and Content Officer, Forvis Mazars
Rosa.Mejia-Banks@mazars.co.uk / +44 (0) 20 7063 4934