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Global Finance Magazine
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Private Equity Set For M&A Surge In 2025
- Private equity firms' $2 trillion dry powder is set to fuel a surge in mergers and acquisitions in 2025.
- The unused capital has been accumulating since high interest rates and low returns created valuation mismatches in 2021.
- The amount of available capital dropped off significantly in 2023 and 2024.
- Private equity activity experienced a spike in 2024, climbing to 36% in value.
- Pent-up demand among investors and lower interest rates are expected to encourage activity.
- However, almost 80% of limited partners have declined reinvestment opportunities, citing persistent liquidity constraints.
- The regulatory landscape and potential for tax cuts will impact deployment of capital for private equity firms.
- Sectors likely to see the most activity include aerospace and defense, with focus on artificial intelligence and digital transformation.
- Any added layers of tariffs or geopolitical strife may force firms to adjust strategies to keep up with the evolving landscape of international trade.
- 2025 will be a year of transition for private equity, with the potential for growth and strategic acquisition substantial for those who stay ahead of the curve.
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