Bracedfor

shiftingweather

McKinseyGlobalPrivateMarketsReport2025

May2025

WelcometoMcKinsey’sGlobalPrivateMarketsReport2025

Conditionsforglobalprivatemarketsweredecidedlymixedin2024.Dealmakingremainedtepid,forinstance,whilefundraisingacrossallassetclassesfelltoitslowestlevelsince2016,evenastheperformanceofpublicmarketsincreased.Yetcapitaldeploymentincreasedbydouble

digitsacrossassetclasses,asmanagersadaptedtoaworldofinterestratesstructurallyhigherthaninpreviousyears.Investorinterestandconfidenceinprivatemarketsremainedstrong.

InMcKinsey’slatestsurveyoftheworld’sleadingLPs,investorssaythattheywillallocatemorecapital,notless,toprivatemarketsoverthecomingyear.

Conditionsarelikelytoremainunevenforprivatemarkets.Atthetimeofthisreport’spublication,geopoliticalinstabilityandchangesintradepolicyareemergingascriticalchallengesfor

managersandinvestors.Meanwhile,innovationintechnology,particularlytherapidadvancementofgenerativeAI,hascompelledleadersinprivatemarketstobuildnewcapabilitiesintheirquesttofindmorevalue.

Whatstruckusmostwhenwritingthisreport,however,istheresilienceshownbyprivatemarketstakeholdersastheynavigateanindustryintransition.Fundraisersarelookingbeyondclosed-

endchannelstoraisecapitalinnewvehicles,suchasevergreenfunds.Dealmakersandoperatorsaremovingfromtraditionalfinancialengineeringtofocusonsustainedoperationaltransformation.AndLPsaremovingfrombeingpassiveallocatorstoinvestinginGPsthemselves(asthriving

secondariesandGPstakesmarketsreveal).

Inthefirstpartofthereport,weanalyzehowprivateequity,realestate,privatedebt,and

infrastructureassetclassesfaredin2024.Inthesecondpart,weshareourperspectiveson

threepressingissuesthatcutacrossassetclasses:theexitbackloginPE,theriseofalternativesourcesofcapital,andtheincreasinglyattractiveworldofsecondariesandGPstakes.

Theperspectivessharedherearebasedonourlong-runningresearchonprivatemarkets,ourproprietarydata,industry-leadingdatafromexternalpartners,andourexperienceinthefield,workinghandinhandwithglobalinvestors,assetowners,andcapitalallocators.

Wehopeyouenjoyreadingandlookforwardtohearingfromyou.

AlexanderEdlich

SeniorPartner,

NewYork

ChristopherCrokePartner,

London

FredrikDahlqvist

SeniorPartner,

Stockholm

WarrenTeichner

SeniorPartner,

NewYork

Bracedforshiftingweather1

Contents

3Assetclassesinreview

4Privateequityemergingfromthefog

8Dealmakers:Bouncingback,especiallyatthetop

18Fundraisers:Enduringpressure,buttheoutlookisbright

23LPs:Distributiongrowthoffsettingmutedreturns

28Operators:Thevaluecreationimperativeendures

31Realestatereachesfordaylight

33Dealmakers:Capitalizingonrenewedgrowth

38Fundraisers:Navigatinguncertainterrain

41LPs:Repositioninginashiftingmarket

44Privatedebtremainssteadyinthecrosswinds

45Dealmakers:Growthinprivatedebtissuance

50Fundraisers:Directlendingremainsstrongamidacoolingmarket

53LPs:Subduedbutconsistentperformance

55Infrastructurepoisedforclearerconditions

57Dealmakersandoperators:Regainingtheirstride

59Fundraisers:Facingongoinghurdles

64Industrydeepdives

65Alternativeassetsgetmorealternative:TheriseofnovelAUMforms

66Whyarealternativesourcesofcapitalproliferating?

68Whatvalueisatstake?

70What’sthepathforwardforGPs?

72Privateequity’spathtoclearingthehistoricexitbacklog

74Privateequity’sexitchallenge

76Preparingforanexit

79SecondariesandGPstakes:Thenextwaveofprivatemarketinnovation

80Secondariessustainupwardmomentum

85GPstakes:Anascentbutgrowingstrategy

89Authors

89Furtherinsights

90Acknowledgments

2Bracedforshiftingweather

Assetclassesinreview

Bracedforshiftingweather3

4Bracedforshiftingweather

Privateequityemergingfromthefog

Globaluncertaintiesremainedin2024,butthepath

forwardforprivateequitybecameclearer,withareboundindealmakinganddistributions.

Bracedforshiftingweather5

Tothecasualobserver,2024mayhavefeltlikeyetanotherdifficultyearforprivateequity(PE)globally.Fundraisingremainedtough—down24percentyearoveryearfortraditional

commingledvehicles,markingthethirdconsecutiveyearofdecline.Investmentreturnsweremuted,especiallycomparedwithbuoyantpublicmarkets.

Ouranalysisrevealsamorenuancedpicture.Aftertwoyearsofmurkyconditions,PEstartedtoemergefromthefogin2024.

Forone,thelong-awaiteduptickindistributionsfinallyarrived.Forthefirsttimesince2015,

sponsors’distributionstoLPsexceededcapitalcontributions(andwerethethirdhigheston

record)1ThisincreaseindistributionsarrivedatanimportanttimeforLPs.Inour2025proprietarysurvey2oftheworld’sleadingLPs,2.5timesasmanyLPsrankeddistributionstopaid-incapital

(DPI)asa“mostcritical”performancemetric,comparedwiththreeyearsago.Therewasalsoareboundindealmakingaftertwoyearsofdecline,withanotableincreaseinthevalueand

numberoflargePEdeals(above$500millioninenterprisevalue).Exitactivity,intermsofvalue,startedtowhiragainaswell,especiallysponsor-to-sponsorexits.

Thisresurgencewaspoweredbyamuchmorebenignfinancingenvironment.Thecostoffinancingabuyoutdeclined(eventhoughitremainsmuchhigherthantheten-yearaverage),andnew-

issueloanvalueforPE-backedborrowersalmostdoubled.Inasignofsponsors’confidenceamidimprovingfinancingconditions(spurredbymonetaryeasing),entrymultiplesincreasedafter

decliningin2023,assponsorscouldsellmorecompaniesatahigheraveragepricepercompany.

Thecontrastbetweenthepastthreeyearsandthepriorperiodcouldnothavebeenstarker.

Therapidrun-upinglobalinterestratesfrom2022to2023(anincreaseofmorethan500basispointsintheUnitedStates)shookPEtothecore,anindustrythathadacclimatedtocheap

leveragefornearlyadecade.Therewasaraftofothermacroeconomicchallengestoo,includingpersistentinflationandincreasedgeopoliticaluncertainty.Theseandotherheadwinds

promptedaslumpindealmakingwhilecreatingunanticipateddisruptionsinportfoliocompanies.Theyalsocomplicatedmanagers’abilitytodeterminethetrueearningsoftargetcompanies,

especiallythosepurchasedatloftyvaluationsintheaftermathoftheCOVID-19pandemic.

Eveninvestorswithnear-termliquidityrequirements—andconvictioninthelong-termvalueofpotentialacquisitions—struggledtoexecutedealsinacautiouslendingenvironment.

ButPEisnowstartingtosurfacefromthesechallenges—likelymoreresilientanddurablethanbefore.InourLPsurvey,30percentofrespondentssaidtheyplantoincreasetheirPE

allocationsinthenext12months.BeyondofferingLPsdiversification,thecontinuedappealoftheassetclasscanalsobeexplainedbyitslong-termperformancetrajectory.Sincetheturn

ofthemillennium,PEhasoutpacedtheS&P500—rewardingthoseinvestorswhocanstomachtherelativelylowerliquiditythattypicallycharacterizesPEinvestments.

1Dataisfromthefirsthalfof2024only.

2January2025,n=333.

6Bracedforshiftingweather

GPs,too,areevolvingandinnovating.In2024,totalglobalPEassetsundermanagement(AUM)appearedtodecline3by1.4percentbythetraditionalmeasureofclosed-endcommingledfunds.YetthisdropdoesnotcapturethenovelwaysinwhichGPsareunlockingalternativesourcesofcapital,suchasfromseparatelymanagedaccounts,co-investments,andpartnerships.These

alternativeformsofcapitalhaveprovidedamultitrillion-dollarboosttoglobalPEAUM.GPsarealsoincreasinglysourcingnewfundsfromnoninstitutionalinvestors,suchashigh-net-worth

individuals.Theydothisthroughmultiplechannels(suchasaggregatorsandwealthmanagers)andwithmultiplevehicles(suchasopen-endandsemi-open-endfunds)—allofwhicharemoreaccessiblethantraditionalclosed-endvehiclestoretailandhigh-net-worthinvestors.

ToaddressgrowingliquiditydemandsfromLPs,anincreasingnumberofGPsarecreatingnewfundstructures,includingsettingupcontinuationvehicles.Andtheyareincreasinglyexpandingtheiruseofdealstructuressuchaspublic-to-private(P2P)transactionsandcarve-outs,to

acceleratedeployment.InEurope,whereP2Pactivityhashistoricallybeensubdued,thetotalvalueofP2Pswasup65percentin2024.

Meanwhile,scalecontinuestoprovideacompetitiveadvantagetomanagers:Overthepast

fiveyears,thetop100GPsmadeapproximatelythreetimesmoreacquisitionsofcompetingGPsthantheydidinthepreviousfiveyears.ThisscalecouldprovideGPswithmoreflexibilityand

helpthemdiversifyincomestreams;although,itscorrelationwithperformanceorfundraisingisunclear(smaller,midmarketfundsprovedeasiertoraisein2024thanthelargestfunds).

Ofcourse,thefoghasn’tentirelycleared:Thereweresomeindustrypocketsthatcontinuedtofaceroughweather.Venturecapital(VC)recordedabiggerdeclineindealcountandlower

growthindealvaluethanotherPEsubassetclassesglobally.Acrossassetclasses,AsialaggedbehindNorthAmericaandEuropeyearoveryearinfundraising(drivenprincipallybyaretreatfromChina),performance,anddealactivity.Asthefoglifts,wecanmoreclearlyseethoseinperil—evenwithinbetter-performingassetclasseslikebuyouts.Somefundsarefacingtwin

pressuresofelevatedmarksandtheinabilitytoselltheirportfoliocompanies.Overtime,thespreadbetweenbetter-differentiatedandbetter-performingfundsandless-differentiated

andworse-performingfundsmaywiden.

ThePEindustrywillalsoneedtomonitorandaddressotherchallenges.Itisuncertain,fornow,whetherorforhowlongthehangoverfromtheexuberantdealmakingof2021and2022willlast.Theexitbacklogofsponsor-ownedcompaniesisbiggerinvalue,count,andasashareoftotal

portfoliocompaniesthanatanypointinthepasttwodecades.Sellingtheseassets,especiallywhenthemarksarelikelytoremainelevatedonmanysponsors’books(givenhighentry

multiplesin2021andtheincreasingroleofGP-ledsecondaries,whichoftenbringexitsbelowmarks),willrequiremorethanjusthighhopesthatthemarketwillturn.Refinancingthose

portfoliocompaniesinanuncertain,higher-rate,andmorediscerninglendingenvironmentwillalsobechallenging.Meanwhile,investorsandoperatorsneedtoconsiderincreasinggeopolitical

3Fromtheendof2023throughthefirsthalfof2024.

Bracedforshiftingweather7

uncertainty—forexample,thethreatoftariffs—astheyunderwriteanddrivevaluecreation

initiatives.AllstakeholdersmustalsoconfrontrapidevolutionsinAI.Whatistopofmindforthe

investorsandoperatorsweworkwithisbuildingbest-in-classdatascienceteamswithinfund

operations,developingAI-enabledvaluecreationinitiativesthatcandriveportfolio-wideimpact,andscalingexternalAIpartnerships.

InthisfirstarticlefromourflagshipGlobalPrivateMarketsReport,weanalyzehowPEfaredin2024—andwhatitmightmeanfortheyearahead.Weconsiderthisfromtheperspectiveof

fourgroups:dealmakers,fundraisers,LPs,andtheoperatorstaskedwithcreatingvalueinprivatelyheldfirms.

Heatmap

Theheatmapshowskeymetricsacrossprivateequityassetclasses.

Globalprivateequity,alldealsizes

NegativeforPEindustry

PositiveforPEindustry

GPs

Macroenvironment

LPs

201920202021202220232024

Interestrate(%)1

2.2

0.4

0.1

1.7

5.0

5.1

Inlationrate(%)

3.5

3.3

4.7

8.6

6.7

5.8

Dealvalue(%year-over-year[YOY]growth)

–898

341

2

4

–22

–25

14

Dealcount(%YOYgrowth)

–5

–18

–13

PE-backedexitdealvalue(%YOYgrowth)2

–8

–11

54

102

–16

–6

–14

PE-backedexitdealcount(%YOYgrowth)2

–20

32

–54

–4

8

Medianbuyoutentrymultiples(purchaseprice/EBITDA)3

10.0×11.2×11.8×

12.0×11.2x11.9×

13–1036

Fundraisingofclose-endcommingledfunds(%YOYgrowth)

–7

–12

–24

LPPEtargetallocation(%)4

Capitalcallsinexcessofdistributions(%ofdistributions)5

1-yearpooledIRRfor2000?21vintagefunds(%)6

6.8

3

40

6.3

34

23

25

6.1

18

7.5

20

8.2

23

6

8.3

–14

4

–8

Note:Dealsize?lteronlyafectsdealvalue,dealcount,privateequity(PE)–backedexitdealvalue,andPE-backedexitdealcountmetrics.

1Averageannualcentralbankinterestrate:EfectivefederalfundsrateisusedasaproxyforNorthAmerica,China’s1-yearmedium-termlendingfacilityrateasaproxyforAsia,andEuropeanCentralBank’smainre?nancingoperationsrateasaproxyforEurope.

2ExitsofPEinvestments:PEinvestmentsincludethosemadebyPEinvestorsaswellasbysomeadditionalinvestortypesintomaturecompanies.Excludes

venturecapital.CapitalcallsinexcessofdistributionsandPE-backedexitsreportedonlyforallPE.

3Medianbuyoutentrymultiplesdatareportedonlyforglobalbuyout.Buyout?guresdisplayedforallglobalPEasproxy.Dataoncapitalcallsinexcessof

distributions,IRR,andmedianbuyoutentrymultiplesasofQ32024.

4LPPEtargetallocationdatareportedonlyforallglobalPE.

5Excludesventurecapital.Dataoncapitalcallsinexcessofdistributions,IRR,andmedianbuyoutentrymultiplesasofQ32024.Anegativevalueindicatesthatdistributionshaveexceededcontributionsingivenyear.

6Dataoncapitalcallsinexcessofdistributions,IRR,andmedianbuyoutentrymultiplesasofQ32024.

Source:CEMBenchmarking;EuropeanCentralBank;FederalReserveBankofSt.Louis;InternationalMonetaryFund;MSCI;People’sBankofChina;PitchBook;Preqin;StepStoneGroup

McKinsey&Company

8Bracedforshiftingweather

Dealmakers:Bouncingback,especiallyatthetop

GlobalPEdealmakingreboundedsignificantlyin2024aftertwoyearsofdecline,risingby

14percentto$2trillion(Exhibit1).Theuptickinactivitymade2024thethird-most-active

yearonrecordfortheassetclassbyvalue.Dealvalueincreasedacrossbuyout,growthequity,andventurecapitalsubassetclassesbutdeclinedsteeplyinAsia(

seesidebar“Asia’s

privateequityslowdown”

).

Exhibit1

Privateequitydealvalueincreased14percentaftertwoyearsofdecline.

TotalNorthAmericaEuropeAsiaRestofworld

Globalprivateequitydealcount,byregion,thousandsofdeals1

Globalprivateequitydealvalue,byregion,$billion1

80

3,200

70

2,800

60

2,400

50

2,000

40

1,600

30

1,200

20

800

10

400

00iii

20152018202120242015201820212024

1Includesprivateequitybuyoutandleveragedbuyout(add-on,assetacquisition,carve-out,corporatedivestiture,debtconversion,distressedacquisition,

managementbuyout,managementbuy-in,privatization,recapitalization,public-to-privatetransaction,andsecondarybuyout),PEgrowthandexpansion

(recapitalization,dividendrecapitalization,andleveragedrecapitalization),platformcreation,andfundinginangelstage,seedround,early-stageventurecapital(VC),andlater-stageVC,aswellasrestartoffundingstages.

Source:PitchBook

McKinsey&Company

Bracedforshiftingweather9

Sidebar

Asia’sprivateequityslowdown

Asiawastheonlyregionthatsawadeclinein

assetsundermanagement(AUM)lastyear,

droppingby5.5percentto$2.7trillion(exhibit).Thiswasaccompaniedbyacontinueddrop

infundraising(32percentlowerin2024),led

primarilybydeclinesinChina,aswellas

lacklusterperformance(lessthan0.2percentIRRthroughthefirstthreequartersof2024).Asa

result,privateequity(PE)netassetvalue(NAV)

anddrypowderbothdeclinedintheregion,falling2.3percentand20.0percent,respectively.

IncontrasttoAsia,NorthAmericanand

EuropeanPEAUMincreasedat4.4percentand3.0percent,respectively,fromthefirsthalfof

2023tothefirsthalfof2024.TheAUMgrowthinbothregionswasdrivenbyNAVincreases

andsubduedbydrypowderdeclines(withdealvolumesrisingandfundraisingslowing).

NorthAmericaandEurope’sPENAVroseby8.8percentand9.2percent,respectively,

whiledrypowderdeclinedby6.8percentand10.2percent,respectively.

Exhibit

Asiawastheonlyregiontorecordadeclineinassetsundermanagementforclosed-end,commingledprivateequityfunds.

Privateequityassetsundermanagementin2000–H12024,byregion,$trillion1

10

8

6

4

2

0

20002003200620092012201520182021H1

2024

4.5-yearCAGR,

2019–H12024,%

Growth, H12023–H12024,%

Total

13.6

1.0

NorthAmerica

17.0

4.4

Asia

8.8

–5.5

Europe

14.0

3.0

Restofworld

10.8

3.8

1Includesbuyout,growth,venturecapital,andotherprivateequity.Excludessecondaries,fundsoffunds,andco-investmentvehicles.Source:Preqin;McKinseyanalysis

McKinsey&Company

36

38

42

38

43

47

48

46

39

44

44

34

10Bracedforshiftingweather

Meanwhile,thenumberofPEdealsacrosssubassetclasses4droppedforathirdconsecutive

year,largelybecauseofthecontinueddeclineinventurecapital’sdealmakingvelocity,whichsawa16.9percentyear-over-yeardropincount(seesidebar“

Venturecapital’scontinuedcrunch

”).Additionally,theglobaldealcountforbuyoutsdecreasedmarginallyby1.7percent,withyear-over-yeargrowthamonglargerdealsinNorthAmerica(Exhibit2).

Exhibit2

Buyoutdealcountasashareoftotaldealcountandbuyoutdealslargerthan$500millionasashareofdealvalueincreasedin2024.

NorthAmericabuyoutdealcount,bydealsize,%oftotalbuyoutdealcount1

7

7

4

9

9

10

11

9

8

12

13

15

16

16

5

19

7

17

22

11

8

9

9

>$1billion

11

10

12

11

9

20

13

9

11

9

28

$500million–1billion

28

29

30

27

26

28

25

28

27

31

29

27

26

$100million–

26

499million

71

59

55

54

53

56

52

51

53

47

48

44

44

44

43

43

<$100million

2020

2013

2015

2016201720182019

40474345

2012

2023

2022

2024

2021

2011

2010

2014

2009

Buyoutdeals

>$500million,%ofdealvalue1

Note:Figuresmaynotsumto100%,becauseofrounding.

1IncludesPEbuyout/LBO(add-on,assetacquisition,carve-out,corporatedivestiture,debtconversion,distressedacquisition,managementbuyout,managementbuy-in,privatization,recapitalization,public-to-private,secondarybuyout)andplatformcreationdealsinNorthAmerica.

Source:PitchBook;McKinseyanalysis

McKinsey&Company

4Buyout,growthequity,andventurecapital.

Sidebar

Bracedforshiftingweather11

Venturecapital’scontinuedcrunch

In2023,fundraisingforventurecapitaldeclinedbynearly58percentyearoveryear.In2024,

therateofdeclinewaslower(fundraisingfor

buyouts,venturecapital,andgrowthequityeachdeclinedby23percentto25percent),butthe

strategycontinuestostruggleacrossseveralmetrics.Thispoorperformanceisindicativeoftheongoingchallengesofthestart-up

environmentglobally,aswellascontinueddeclinesinAsia,aregionthatcomprises

morethanhalfofventurecapital’stotalassetsundermanagement(exhibit).

Considerthis:Lastyear’s$102billionfundraisingtotalforventurecapitalwaslessthanathird

of2022’s$314billion.Dealactivityinventure

capitalhasalsoremainedfarmorechallengedthanforbuyoutsacross2023and2024.

Whilebuyout’sdealvaluereboundedby

15.5percentin2024,itwasonly6.7percenthigherforventurecapital.Therewasa

noticeablegapindealcountaswell:Buyoutdealcountfellby1.7percentcomparedwithventurecapital’s16.9percentdrop.

Therewassomesilverliningforthestrategy

lastyear:Amarginalimprovementinventure

capital’sperformance(anIRRof1.9percent

throughSeptember30,2024,versusanegativeIRRof2.5percentinthepreceding12months).

Eventhen,buyoutstrategyoutperformedventurecapital,withanIRRof4.5percent.

Exhibit

Venturecapitalledthedeclineinclosed-end,commingledprivateequityassetsundermanagementin2024.

Privateequityassetsundermanagementbyassetclass,2000–H12024,$trillion1

10

8

6

4

2

0

20002003200620092012201520182021H1

2024

Growth, H12023–H12024,%

4.5-yearCAGR,2019–H12024,%

Total

13.6

1.0

Buyout

14.3

4.0

Venturecapital

13.9

–4.4

Growth

12.8

6.4

Otherprivate7.9–4.7

equity

1Excludessecondaries,fundsoffunds,andco-investmentvehicles.Source:Preqin;McKinseyanalysis

McKinsey&Company

12Bracedforshiftingweather

Alookatwhatdealmakerspaidandhowtheyfinancedtheirdealssuggestsincreasedconfidenceindeployment.ConsidertheentryEBITDAmultiplesinthebuyoutsubassetclass,which

revertedto2021–22levels,afterdecreasingin2023(Exhibit3).Theoverallincreaseinmultiplesisapositivesign,althoughsomeofitmayalsobeattributedtoachangeinthequalitymix,wheresponsorsareexitinghigher-qualitybusinessesthatareachievingbettervaluations.

Exhibit3

Medianglobalbuyoutentrymultiplein2024wasthesecondhighestonrecord,reboundingalongsidedealvaluefollowinga2023decrease.

Medianglobalbuyoutentrymultiplesandtotalbuyoutdealvalue

Medianglobalbuyoutentrymultiple,purchaseprice/EBITDA1

12x

9x

6x

3x

0

11.812.011.9

11.211.2

9.810.09.2

8.37.4

8.58.6

7.7

7.4

7.66.5

200920122015201820212024

Totalglobalbuyoutdealvalue,$billion2

2,100

1,800

1,500

1,200

900

600

300

0

200920122015201820212024

1AsofSept30,2024.

2Includesprivateequitybuyoutandleveragedbuyout(add-on,assetacquisition,carve-out,corporatedivestiture,debtconversion,distressedacquisition,managementbuyout,managementbuy-in,privatization,recapitalization,public-to-privatetransactions,andsecondarybuyout)andplatformcreation.

Source:PitchBook;SPIbyStepStone

McKinsey&Company

Bracedforshiftingweather13

PEfinancingcostseasedaslenderspreadsandSecuredOvernightFinancingRates(SOFR)

declinedinmid-to-late2024,drivenbyreducedriskpremiumsandstabilizingrateexpectations.GPsalsoleveredtheirdealsmarginallymorein2024,atroughly4.1timesnetdebttoEBITDA,

versus4.0timesin2023,reflectingimproveddebtavailabilityandlenders’willingnessto

underwritelargercapitalstructures.However,buyoutleverageremainsbelowtheten-yearaverageof4.2timesandwellbelowthe4.7timeshighin2021,indicatingthatwhilecredit

conditionshaveloosened,underwritingdisciplineandvaluationpressuresstillconstrainleverageexpansion.

Withactivedeploymentandfewercapitalcalls,GPsbegantodrawdownontheglobalstockofdrypowder—theamountofcapitalcommittedbutnotyetdeployed.GlobalPEdrypowder

decreased11percent(to$2.1trillion)betweenthefirsthalfof2023andthefirsthalfof2024.Similarly,drypowderinventory—ortheamountofcapitalavailabletoGPs,expressedasa

multipleofannualdeployment—fellto1.89yearsin2024,from2.02intheprioryear,hoveringaroundhistoricallevels(Exhibit4).

Exhibit4

Globalinventoriesofprivateequitydrypowderdecreasedin2024.

Yearsofprivateequityinventoryonhand,turns1Inyear3-yeartrailing

4.0

3.0

2.0

1.0

0

2009201020112012201320142015201620172018201920202021202220232024

Note:1turnofprivateequityinventoryequivalentto1yearofdeploymentbasedonhistoricaldealvalue.

1Capitalcommittedbutnotdeployeddividedbyequitydealvalue.Equitydealvalueestimatedusingtransactionvalueandleverage?guresforfullyear.Drypowderfor2024basedon?gureasofJune30,2024.

Source:PitchBook;Preqin

McKinsey&Company

14Bracedforshiftingweather

Ouranalysispointstofiveglobaltrendsindealmaking.

Biggerisback

NowherewastheoverallreboundmoreevidentthaninlargebuyouttransactionsinNorth

AmericaandEurope.Dealsabove$500millioninenterprisevalueroseinbothvalue(37percent)andcount(3percent),reflectingtheincreaseinaveragedealsize(Exhibit5).Thissegmentis

consideredatrueproxyforindustryhealth,asmanyofthelargestsponsorsareoftenreluctanttoinvestbelowthisthreshold,giventheneedtodeployatscale.Inourworkwithinvestors,

thereisagrowingwillingnessamongsponsorstowritebiggertickets,ledbystrongerconvictionintheirabilitytorealizehigherreturnsandrenewedconfidenceintheindustry’sgrowthoutlook.

Long-termtrendsinsectorallocationpersist

PEinvestors’buyingpreferencescontinuetoevolve.Sectorsliketechnologyoutperformed

(2024wasthethirdhighestonrecordintermsofdealvalue),whilehealthcarecontinueditspost-COVID-19retreat(Exhibit6).Thesetrendsholdacrossdealsizes:Asoftenhappens,larger

sponsors’buyingpreferencescanbemirroredintheinvestmentchoicesofsmallersponsorsthatarelookingtoselltothem.

Exhibit5

Thereboundinprivateequitydealmakingwasledbyanincreasein