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| The Daily Pitch |
| VC, PE and M&A |
| Your edge on global private capital markets |
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| Blackstone sees end to PE distribution drought |
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| (Erik McGregor/Getty Images) |
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By Janelle Bradley, Private Equity Reporter
Blackstone saw an uptick in realizations from its PE portfolio during Q3, a hopeful sign that the industry will once again be able to return significant capital to investors after a multi-year drought in distributions.
The $1.2 trillion asset manager, whose performance is closely watched by the rest of the market, reported $9.3 billion in realizations from its PE business, marking its highest quarterly total of the year so far, according to a presentation accompanying its Thursday earnings call.
This total represents a notable increase from the $7.1 billion recorded in Q2, when market uncertainty and tariff fears weighed on dealmaking. Blackstone accrued $33.4 billion in PE realizations over the last 12 months.
“Directionally healthier markets, more liquid markets, better credit markets, better IPO markets; that's healthier for realizations,” said COO Jon Gray on the call.
“The deal dam is breaking,” he added.
Blackstone is capitalizing on a resurgent window for exits as PE sponsors reacquaint themselves with public markets. According to PitchBook data, Q3 saw eight PE-backed IPOs, a sign of renewed investor appetite after a prolonged drought, though the recovery has proved concentrated in certain sectors, such as energy.
Of the PE-backed companies that went public in Q3, Blackstone participated as a seller in three, said chairman and CEO Stephen Schwarzman.
These included the sale of internet provider Hotwire Communications to Brookfield Asset Management in a deal valuing the business at around $7 billion. The transaction was announced in June, but Blackstone exited the company fully in Q3.
Engineering services provider and Blackstone portfolio company Legence went public in September, fetching a valuation of $2.85 billion. |
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• OpenAI's shopping spree continues with its acquisition of startup Software Applications, which offers an AI assistant for Mac computers. The ChatGPT maker has recently spent billions buying startups, including Io Products, the AI hardware specialist led by former Apple design exec Jony Ive. Full story
• UK PE dealmaking rebounded to £54.4 billion, according to our Q3 2025 UK Market Snapshot. A surge in buyouts boosted quarterly deal value to its highest level since Q1 2022. Read more or download the full Q3 2025 UK Market Snapshot |
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| Europe's VC defense tech sector sharpens focus on weapons, hardware |
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By Leah Hodgson, Senior VC Reporter
Specialized hardware and weapons systems are becoming priorities for VCs as their appetite for Europe's defense tech market heats up.
European startups in the space secured $4.2 billion in the first nine months of this year, nearly reaching 2024's total, according to our latest Emerging Tech Research.
The segment attracting the most funding is autonomy and platforms, which includes autonomous air and ground systems. Defense AI, command-and-control and mission software—covering AI-driven systems for mission planning, decision support and training—have also received significant funding over the past year.
But one area is increasingly gaining traction: strike, air defense and counter-unmanned aerial systems.
This segment, which has only recently been on VCs' radar, encompasses technologies ranging from detecting and neutralizing hostile drones to innovative strike systems such as lightweight precision missiles and tactical projectiles. |
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While not the most heavily funded segment of the defense tech market, it is the fastest growing. Through Q3 2025, startups in the space had raised just under $250 million, compared to just $5.1 million in 2024.
The sudden rise in investment in strike, air defense and counter-UAS comes as investors and LPs increasingly embrace single-use technologies.
For years, dual-use technologies—those that can serve both civilian and military purposes—were the only way for investors to gain exposure to defense due to ESG or other factors. But mindsets among European LPs and GPs are changing as geopolitical conflicts intensify.
Earlier this year, Estonian LP SmartCap launched a defense fund. Finnish pension fund Varma removed some restrictions on defense investments, now only excluding companies making "controversial weapons."
Companies in the strike, air defense and counter-UAS space can have dual-use applications, for example, in civil aviation safety or weather monitoring. But the fact that single-use players and weapons makers are now part of the investable set marks a psychological shift in the VC ecosystem.
Besides shifting mindsets, this segment now presents a clear financial case. European defense budgets have dramatically increased, with regional total defense spending surpassing 2% of GDP. |
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Smart reads that caught our eye.
• SPACs are back. More companies are going public via SPAC in areas like nuclear energy, cryptocurrency and quantum computing, and it's impossible to ignore the connection to the Trump administration. [Bloomberg]
• Brain rot isn't just a phenomenon affecting those of us scrolling TikTok in bed—AI models are impacted too. A study shows that absorbing too much low-quality content online actually induces cognitive decline in large language models. [Fortune]
• China envy? The elites of Silicon Valley are marveling at China’s speed in building infrastructure, its manufacturing power and its ingenious AI company DeepSeek. [ | | | | | | | |
