The global private equity industry recovered in 2024, with a rebound in dealmaking, however ongoing headwinds from economic uncertainties and sluggish fundraising throws the potential for a full-blown private equity recovery into doubt, according to consultancy firm Bain & Co.’s latest annual Global Private Equity Report, released on March 3.
“Pent-up appetite among general partners to get deals done and put aging dry powder to work, coupled with an improving economic environment as central banks cut policy interest rates, fueled a 37% year-on-year rise in buyout investment value to $602 billion in 2024," Bain said in a press release issued in conjunction with the report.
In addition, global exit value soared 34% year-on-year to $468 billion, while exit count climbed by 22% to 1,470, “marking signs of a tentative but welcome thaw in the exits deep freeze,” Bain said in the release.
While global buyout investment value rose by 37% in 2024, the number of deals climbed by a more modest 10% year-on-year to about 3,000 in 2024.
And despite a resurgence in investments and exits, Bain’s report cautioned that private equity’s continued momentum in 2025 depends on navigating a dynamic macroeconomic landscape, which includes such ongoing inflation trends, interest rates, trade policy, and geopolitics.
Meanwhile, fundraising declined for the third year in a row, dropping 24% year-on-year in 2024 and down 40% from the all-time peak of $1.8 trillion in 2021.
The number of funds closed dropped by 28% to 3,000 in 2024 – about one half the annual pace the industry was keeping before the COVID-19 pandemic.
The year “2024 can be considered the year of the partial exhale. Whether the renewed impetus in 2024 can build will depend on how policy unfolds,” said Hugh MacArthur, chairman of the global private equity practice at Bain, in the release. “We think the headwinds that have held back activity since mid-2022 should continue to dissipate. The industry is anxious to make deals, GPs are finding creative ways to boost liquidity, more dollars should flow in from sovereign wealth funds and private wealth and, returns remain strong.”
But MacArthur added that deal appetite is “still tempered by the uncertainties keeping markets on edge,” and that investors are “looking for clarity to break through the policy clouds on the economy, trade, regulation and geopolitics.”
The report also warned that the industry’s “costs to generate market-beating returns are climbing steeply even as fees charged to investors are coming under heightened pressure.”
Average net management fees have dropped by as much as half since the global financial crisis, Bain noted in the report.
“Generating alpha has never been more challenging,” said Rebecca Burack, head of the global private equity practice at Bain, in the release. “Strong performance is getting harder, not easier.”
