The continuing deal drought and reduced re-investments from allocators continued to weigh on private equity managers in 2025 causing a second year of lower fundraising.
Fund managers pulled in $398 billion in 2025 (Figure 1), down 14% on the prior year and more than 27% below 2023’s total.
Secondaries remained a bright spot, with the sector hitting a record high of over $93 billion raised, a 6.6% increase over 2024.
Within this environment, the market has become more bifurcated. A cohort of larger and specialist, top-performing managers continue to thrive, albeit under tougher operating conditions. Conversely, many firms are in survival mode, holding onto assets for longer and either struggling to raise new funds or seeking to tap newer pools of capital.
Fundraising is unlikely to rebound until the market sees a prolonged uptick in deal activity. Therefore, 2026 is expected to remain difficult—especially for newer and mid-sized firms without strong track records. As a result, more firms are expected to consolidate, scale back or exit fundraising altogether.
Top 20
The 20 largest buyout funds raised a combined $175 billion in 2025—over 55% of the total buyout funds raised across 147 fund closes tracked.
Several large funds exceeded expectations (Figure 2). Thoma Bravo beat its initial target for both Thoma Bravo Fund XVI and Discover V, which pulled in a combined $32.4 billion, surpassing its $27 billion goal. Veritas Capital Fund IX closed at its $14.4 billion hard cap, while Bain Capital secured $11.8 billion in external commitments ($14 billion total) for Bain Capital Fund XIV, beating its initial $10 billion target. On the flip side, Blackstone quietly closed Capital Partners IX in March 2025 at $21.1 billion, falling short of its initial $25bn target. The New York-based alts giant remains on the market with its latest Asia-focused buyout fund, Blackstone Capital Partners Asia III, which is set to hit its $12.9 billion hard cap this year, exceeding its $10 billion target.
US managers accounted for 16 of the top 20 buyout funds in 2025, raising 88% of the total (Figure 3).
Mandates
The largest allocation tracked last year went to emerging secondaries manager Melange Capital Partners (MCP) which won a $2 billion SMA mandate from North Carolina Retirement Systems (NCRS) (Figure 4).
MCP was launched in December 2022 by Eric Chang and Brandon Wilson to focus on secondary and structured solutions across traditional energy and energy infrastructure sectors. Chang previously worked within the energy, natural resources and infrastructure group at Texas TRS. NCRS also backed the firm’s debut commingled fund, Melange Secondaries Partners, which closed a $430 million in November 2025.
Two other secondaries commitments appeared on the list, a sign of the growing importance of the sector. New York State CRF allocated $550 million to TPG GP Solutions II, which focuses on GP-led transactions, while CPPIB committed $517 million to PSG Sequel, a continuation vehicle created to house six assets from PSG III, PSG IV, and PSG Europe I.
Two of the top three commitments went to strategies focused on Asia.
QIA partnered with ORIX Corporation on a fund to invest in Japanese companies, primarily targeting business succession, privatization of listed companies, and carve-outs.
CPPIB committed $700 million to BPEA Private Equity Fund IX. The strategy focuses on large-cap control buyout investments in Asia. BPEA EQT Asia was an existing relationship for the investor.
Funds in market
Plenty of megafunds remain in market, with the top 10 largest funds collectively seeking just over $185 billion (Figure 5). The two most recent funds to join the list are Francisco Partners VIII and TPG Partners X.
Francisco Partners VIII is targeting $14 billion, a modest increase from the $13.5 billion secured by its predecessor. The fund is being raised alongside Francisco Partners Agility IV, which is seeking $3.5 billion, as the firm continues to take a ‘barbell’ approach to its core markets. The flagship fund targets larger, established technology companies, while the Agility strategy focuses on smaller, high-growth, early stage or niche opportunities. TPG Partners X secured a strong $9.1 billion first close in November, hitting 70% of its $13 billion target. The prior vehicle in the series, TPG Partners IX, closed in 2024 at $12 billion.
Secondaries
Private equity secondaries fundraising surged to a record $93 billion in 2025, representing almost 19% of total capital raised (Figure 7).
Growth was driven primarily by the prolonged ‘DPI crisis’ with traditional exit routes like IPOs and M&A remaining difficult.
A further $46 billion was secured in evergreen vehicles, according to Jefferies estimates. Many large investors such as endowments and pensions have also been investing in the sector directly, driving transaction volumes to a record $240 billion in 2025, a 48% year-over-year increase.
The market is expected to continue to grow rapidly and many established players have returned to market sizeable funds (Figure 8). The top 10 funds currently fundraising are seeking to raise a combined $117.5 billion, with several products widely expected to exceed fundraising targets.
$240 billion: Total secondary transaction volumes in 2025 – nearly triple the total capital raised by secondaries funds.
Fund size
Funds in the $1 billion to $5 billion range pulled in the largest share of capital commitments in 2025 (Figure 9). 89 funds in this segment drew almost 41% ($200 billion) of the $490 billion raised.
Nine megafunds secured almost a third of overall commitments. On average, these funds took just over 21 months to close and were split between buyout (six) and secondaries (three) strategies. Typically, these funds were from established blue-chip names, with all firms raising megafunds established in 2008 or earlier. Six of the nine managers were founded in the 1980s or 1990s.
The average buyout fund size remained relatively flat, growing just 0.1% year-over-year (Figure 10). Between 2020 and 2024 annual growth averaged 7.4%. The era of double-digit growth between vintages appears to have hit a ceiling for many private equity firms as they pivot towards creating liquidity and driving operational alpha.
Average fund size increased by 33% over the past five years.
Sector focus
Diversified funds picked up over 56.3% of total commitments (Figure 11), as allocators continue to stick with core diversified exposure supported by selectively allocating to sector specialists.
Larger, diversified funds remain appealing as investors seek to capture global megatrends. To benefit from scale and to execute multi-dimensional deals, fund managers must have on-the-ground teams in every region with operating groups able to scale efficiencies across a range of portco’s across different sectors.
TMT and software specialists secured 23.4% of overall capital followed by business services (5.9%), industrials (4.1%), and healthcare (3.5%).
$111 billion: Raised by technology and software-focused private equity funds in 2025, the dominant specialist sector, accounting for nearly a quarter of all capital. Outside of diversified strategies, it accounts for over half of capital raised.
Regional breakdown
Funds focused exclusively on North America continued to see a drop-off in capital raised (Figure 12). Products focused on North America pulled in 40% of the overall assets, compared to an average of 62% over the prior five years.
Multi-region funds picked up 45% of overall allocations, up from 21% in 2024. While North America remains the largest market, investors are increasingly cooling on the region due to high entry premiums and intense competition, favoring funds that can pivot to where the best relative value exists.
Europe-focused funds held relatively steady, garnering 12% of total capital raised, compared with an average of 11% over the prior five years.