Forvis Mazars, LLP, ranked among the largest public accounting and consulting firms in the United States, is pleased to present the Global Private Equity Report 2025, featuring insights from more than 300 respondents across five continents. This year, North American private equity (PE) firms have demonstrated the highest rate of portfolio performance against expectations, showcasing their ability to navigate economic volatility and capitalize on growth opportunities.
“In addition to overall confidence in performance, the global report found that the United States is also seen as the biggest target market for investment, with the United Kingdom following closely behind,” said Scott Linch, partner and private equity national industry leader at Forvis Mazars US.
Key North American Findings:
- Superior Portfolio Performance: With 33% of firms surveyed citing performance at three years "above planned," North American PE firms outperformed all regions except Central and Eastern Europe (CEE) in internal rate of return (IRR) and alignment with performance expectations.
- Sector Preferences: Financial services and technology and telecommunications remain top investment targets, attracting 51% and 47% of investors, respectively. Within these sectors, firms prioritize businesses with scalable, recurring revenue models and minimal reliance on physical assets.
- Investment Strategies:
- Add-on deals dominated the U.S. market, signaling a preference for platform consolidation and de-risked transactions.
- Average investment ticket sizes remained under $50M, aligning with the industry's focus on more manageable and flexible investments.
- Operational Value Creation: North American firms are leading the way in deploying formalized value creation teams, with some expanding their operations teams by 30% in the past year to drive portfolio growth.
- Fundraising Confidence: North American respondents are confident in the market conditions for fundraising efforts, as 71% said they have a very positive or fairly positive outlook for 2025. Latin America was the second closest region to this confidence level, at 47%.
Responding to Market Challenges:
Concerning challenges, 60% of PE respondents said that market evolution was the top roadblock negatively impacting portfolio performance. This was followed by geopolitical uncertainty at 45% and misalignment with management at 37%.
“Extending portfolio holding periods to maximize value creation amid delayed exits and leveraging digital transformation and ESG integration to enhance long-term growth have been the two biggest strategies to mitigate market evolution challenges,” said Linch. “Global market volatility, driven by interest rates and inflation, will remain the biggest challenge, affecting both short-term gains and long-term investment strategies into 2025.”
Regional Confidence and 2025 Outlook:
North American firms are optimistic about 2025, as confidence in deal activity and portfolio performance remains high. Their confidence contrasts with more cautious outlooks in Europe, where geopolitical uncertainty and regulatory pressures present more significant headwinds.
“North American private equity firms continue to demonstrate their resilience and adaptability,” Linch concluded. “Their commitment to strong fundamentals and resilient growth strategies leaves them well-positioned to deliver strong returns despite broader market challenges.”
To explore the full findings and insights from the Global Private Equity Report 2025, visit: forvismazars.com.