A new study of the world's private equity sectors shows it has matured, but faces a number of challenges.

Private equity dealmaking returned “in force” globally in 2025, with $500 million-plus deals in buyout and growth categories rising 44 per cent to stand at more than $1 trillion, a report from McKinsey & Co says.

The value of PE-backed exits globally also rose more than 40 per cent, helped by a near doubling of exits that happened via initial public offerings on stock markets. There was also a return of “megadeals” – those higher than $2.5 billion. Last year, for example, the take-private of Electronic Arts by a syndicate of firms was a record at $55 billion.

The report comes at a time when this publication continues to hear of wealth sector impatience about delays to exits and returns on invested capital. The private markets sector (equity, credit, real estate, infrastructure and others) has suffered from indigestion, prompted to some extent by the post-pandemic spike in global interest rates. This partly explains why large private market shops such as Blackstone, to give one example, have moved into the private wealth space as a new way of distributing funds, and have used “evergreen” fund structures as part of this. There has also been the rise of “secondaries” as sources of liquidity and more efficient price discovery, and "continuation" vehicles. FWR heard about some of these issues from family office figures at its investment summit in New York City last fall.

“After three years of dampened dealmaking, we observed early in 2025 that the global private equity (PE) industry was `emerging from the fog.' Now, the fog has finally burned off. Dealmaking returned in 2025 in force: Buyouts surged, exits rebounded, and initial public offerings (IPOs) reemerged,” the report, entitled Global Private Markets Report 2026 (February 10, 2026), said. The authors are Alexander Edlich, Chris Llewellyn, Christopher Croke, Rahel Schneider, and Warren Teichner from McKinsey’s Private Capital Practice.

The authors observed that the median private equity purchase multiple increased from 11.3 times earnings before interest, taxation, depreciation and amortization in 2024 to 11.8 times EBITDA in 2025. When compared with public markets, PE returns “remain subdued,” it said.
Another challenge is that the backlog of PE-owned companies still on the books has “never been bigger.”

“We estimate that more than 16,000 companies globally have been held for more than four years, equivalent to 52 per cent of total buyout-backed inventory as of 2025 – the highest on record, and 10 percentage points higher than the past five-year average. Holding periods also remain well above historical levels. The typical company in the portfolio of a general partner (GP) is now held on average for more than six and a half years,” the authors said. 

Such comments can lead to concerns that the rise in private market investing – part of a secular shift that has seen a move from the public listed side since the late 1990s – might have peaked, although that argument is countered by wealth managers who have spoken to Family Wealth Report in recent weeks. 

McKinsey's observation that private equity has recovered after a tough period is not isolated. At