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| The Research Pitch |
| August 30, 2025 |
| Presented by FIS |
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Public PE returns: Large alternatives managers are capitalizing on new growth tracks—private credit and the retail channel—via their $1.7 trillion in perpetual capital strategies. Read more.
Industry research: Read about dealmaking in medtech and consumer packaged foods, two sectors where PE made a healthy showing in Q2.
Q2's most active players: In case you missed them, our Global League Tables rank the busiest investors by industry, region, deal type and more, along with rankings for top advisers, acquirers and law firms. See the lists.
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| Unlock technology for optimal operations |
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Investor demands are evolving. To take advantage of emerging opportunities and attract capital, financial institutions, general partners, fund-of-funds and fund administrators must focus on making their money work harder through optimized fund operations. FIS helps your capital investment work harder by unlocking a cohesive financial ecosystem for strategic growth and optimized performance.
Learn more |
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| Sponsor equity eases as lenders step up |
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The US buyout market continues to demonstrate how quickly conditions can shift.
In 2023, PE sponsors were contributing equity to deals at a cycle-high 51%. By mid-2025, that figure has eased to 46%. The adjustment reflects a shift in lender posture: After two years of caution amid rate volatility, they have returned with greater conviction and a renewed appetite for deal flow.
At the same time, deal sizes are expanding. The median BSL-financed buyout transaction size is now $3.3B, compared with less than $2B prior to 2019.
Smaller transactions are migrating to private credit, leaving the syndicated loan market increasingly dominated by megadeals and take-privates. The result is a market that prizes scale, stability, and companies with demonstrable fundamentals.
Software has played a defining role in this trend. The sector now accounts for nearly 30% of syndicated loan volume, up from around 20% before the pandemic.
With recurring revenues, durable margins, and growth profiles that remain attractive even in higher-rate environments, software assets have become the preferred targets for sponsors and lenders alike.
Leverage, however, tells a more restrained story.
Debt/EBITDA ratios remain below 5x on average, constrained by base rates in the 4.25% to 4.50% range. While credit spreads have narrowed, the cost of capital continues to shape deal structures.
A shift toward more aggressive leverage likely hinges on whether the Federal Reserve delivers the rate cuts already priced into futures markets.
With ample dry powder in PE strategies and lenders showing a greater willingness to support larger transactions, conditions may be aligning for continued growth in capital deployment by GPs.
Leverage levels and policy expectations will be central to anticipating where buyout activity and valuations go next. Where equity contributions are headed over the next year remains an open question—shaped by how lenders balance conviction against caution and how monetary policy evolves.
The full report examines these dynamics in depth, providing the evidence behind the trends. Download it to draw your own conclusions about what comes next. |
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| IPO bar rises, secondaries fill the gap |
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Figma's blockbuster IPO seemingly suggests a revival of VC-backed listings.
In reality, 2025 is still on pace for the weakest IPO market in over a decade. Plus, many high-profile public listings have priced well below private market peaks.
The IPO window, though slightly reopened, has a much higher bar. Growth stories are insufficient as profitability and robust revenues are now prerequisites.
Sector alignment is also key: Defense, crypto, fintech, and AI startups are driving much of the momentum, benefiting from strong policy tailwinds.
Looking ahead, the most likely candidates for public offerings are those that sit at the intersection of resilient business models and national priorities.
As IPOs set new standards, the secondary market fills the liquidity gaps left behind.
In Q2, US VC direct secondaries reached $61 billion in annualized transaction volume. Though notable, this market size is still only a fraction of total unicorn value.
Secondaries are no longer a distress signal, but rather a strategic tool.
Special purpose vehicles (SPVs) have grown more than fivefold in just two years because they allow investors to bypass typical secondaries trading friction. Tender offers are becoming vital for startups to retain talent, especially as the largest unicorns like OpenAI and Stripe offer periodic liquidity.
Looking forward, an expected rebound in primary dealmaking and exit activity will help reprice private assets, increase market transparency, and draw more investors to a wider range of late-stage unicorns in the secondary market, helping propel its growth.
Together, IPOs and secondaries reflect a market in transition. 2025 is unlikely to deliver a surge in exit activity given continued macro uncertainty. Still, the groundwork laid this year could set the stage for a durable liquidity rebound in 2026. |
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Construction & Engineering Report
PE investment in the construction & engineering industry is booming—with Q2 marking the seventh straight quarter of year-over-year growth.
Dealmakers hammered out 339 pacts worth a combined $24 billion—up 21% in value from last year.
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Infrastructure investment helped drive the dealmaking, along with a fragmented market ripe for consolidation. Drilling down, specialty segments—including roofing, metal fabrication, and advisory services—led the way.
Download the report
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Transportation & Logistics Report
PE funding for the transportation & logistics market derailed in Q2 as the challenging trade environment sidelined investors, according to our latest data.
The sector added $3.5 billion across 40 deals—representing a QoQ decline of 69% and 9%, respectively. It was the lowest quarterly haul since early 2024.
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Some segments bucked the trend. Funding for transportation software more than doubled to $468 million QoQ, and freight-forwarding deals jumped to $1 billion, up from $288 million—reflecting demand for solutions that help companies navigate increasingly complex global supply chains. | | | | | | | |
