Private equity exits rise as returns fall

• PE fundraising declined 11% in 2025 to $490.81 billion, marking the second consecutive annual slowdown as limited partners receive lower cash distributions
• The pricing gap originated in 2022 when the S&P 500 fell 19% amid rising rates, but many PE firms avoided marking down portfolio company values
• Blackstone reported $33.9 billion in realizations for 2025, with Q4 generating $10.8 billion—the highest quarterly total of the year—and successfully executed the largest-ever U.S. PE-backed IPO with Medline, which raised over $4 billion and surged 30% post-debut

Private Equity Exits Rise as Returns Fall - Summary

Key Developments:

Global private equity exits increased 5.4% in 2024 to 3,149 deals, but total deal value declined 21.2% year-over-year to $412.1 billion, according to S&P Global Market Intelligence. This reflects an industry finally accepting lower valuations after years of holding out for better prices.

Market Dynamics:

The disconnect traces back to 2022 when the S&P 500 fell 19% amid rising interest rates. Many PE firms avoided marking down portfolio companies, creating a valuation gap between their expectations and what buyers would pay. This resulted in a massive backlog of tens of thousands of companies awaiting exit opportunities.

Industry Impact:

Limited partners (LPs) have received reduced cash distributions, making them reluctant to commit new capital. PE fundraising fell 11% in 2025 to $490.81 billion—the second consecutive annual decline. Deal deployment has also stagnated, with growth concentrated in larger transactions rather than broader deal activity.

Bright Spots:

Blackstone reported strong performance with $10.8 billion in Q4 realizations, bringing 2024 total to $33.9 billion. Management indicated "realizations have begun to accelerate" with a "constructive" outlook.

The Medline IPO marked a breakthrough—the largest PE-backed U.S. IPO ever, raising over $5 billion. The stock has surged nearly 30% since debut, potentially signaling improved conditions for future PE-backed IPOs.

Looking Ahead:

Major PE firms including Apollo (Thursday), KKR (Friday), and Carlyle (Feb. 9) are set to report earnings this week, which will provide additional insight into sector momentum and exit activity.