In our Global Private Equity Report 2025, “Riding the wave of market change,” Forvis Mazars surveyed more than 300 private equity (PE) respondents who provided their perspective on the challenges and opportunities impacting the PE landscape across the world. From economic factors driving strategic changes to an evolving regulatory and geopolitical environment, the PE market is navigating a period of uncertainty—with critical impacts for the technology sector in 2025 and beyond.
Specifically, our report highlights that the technology sector remains a primary area of interest for PE firms. In the U.S., we’re seeing investors targeting specific industry subsectors, including fintech, cloud services, cybersecurity, and artificial intelligence (AI) due to their potential scalability and recurring revenue potential. As technology leaders are looking to take on PE investment, here are five global trends to bear in mind:
1. Economic Volatility
Our report finds that inflationary pressures, coupled with interest rate hikes, are squeezing valuations. However, the PE market has witnessed a noticeable shift toward equity-heavy deals, as firms are avoiding high debt burdens in an environment of rising rates. Consequently, firms are seeking more sustainable, organic growth opportunities instead of relying on debt-driven expansion. Despite ongoing unpredictability, PE firms are confident in market conditions, with those in North America and Asia-Pacific—regions that are considered global hubs for technological innovation—especially positive about portfolio growth for the year ahead.
2. Geopolitical Uncertainty
While technology remains among the top global investment sectors, international deals in high-tech fields are often subject to greater regulatory scrutiny, especially when they overlap with other heavily protected industries, requiring PE firms to navigate an increasingly complex web of global regulation. Many countries, including the U.S. and those in the EU, have introduced stricter investment screening protocols, particularly in the technology sector to monitor foreign direct investments and cross-border data flows. This trend is affecting the ability of firms to engage in cross-border mergers, acquisitions, and partnerships.
-Scott Linch, Partner & Private Equity National Industry Leader, Forvis Mazars US
3. Cross-Border Strategies
Due to current geopolitical uncertainty, PE firms, particularly in Asia-Pacific and North America, are increasingly cautious about cross-border investment projects. Our report finds that this trend has led to a greater reliance on regional expansion strategies, particularly in emerging markets where the cost of entry can be lower but comes with its own set of challenges, such as the cost of repatriating revenues from different jurisdictions, compliance costs, and hiring.
4. Portfolio Performance
The changing dynamics between majority and minority shareholders is demonstrated by firms moving toward co-investment strategies, allowing minority shareholders to align more closely with the long-term goals of the business while benefiting from the expertise of the majority investors. Minority active shareholders report the strongest portfolio performance at both three years and exit, while majority active shareholders show higher internal rates of return, with some in the PE industry speculating this could reflect the types of businesses likely to take on minority shareholders. Our report finds that this trend is particularly prevalent in the fast-paced technology sector, where innovation demands a collaborative approach between investors and management teams.
5. Evolving Value Creation
Our report finds that the top two operational challenges faced by PE firms include:
- Leadership team selection: Attracting and retaining senior staff remains challenging, with firms prioritizing access to and retention of experienced leaders to support portfolio goals. It is increasingly important for technology companies to identify leadership capable of navigating the challenges of rapid technological advancements in AI as well as growing data privacy and cybersecurity threats. Further, within the technology industry, the challenges are extended to identifying and retaining senior engineers given the shortage in talent within certain verticals.
- Key performance indicator (KPI) development and tracking: Firms are focusing on defining and monitoring KPIs to identify improvement areas and provide proactive operational support. For technology companies, it is diving deeper into recurring revenue trends beyond new monthly recurring revenue (MRR) and churned MRR, but rather understanding expansion MRR, e.g., driven by new services, increases in prices, etc.
Considering these five global trends, PE firms are evolving how they manage their portfolios, adopting a more hands-on approach to strategic support and operational partnership and allowing firms to help ensure that their portfolios continue to generate solid returns, even in uncertain market conditions. Even with some headwinds of uncertainty, M&A is expected to continue to be an essential growth strategy for technology companies.
For more information, download a copy of the full report below. If you have any questions or need assistance, please contact a professional at Forvis Mazars.