Adams Street Outlook | Private Markets Poised for Deal Surge and AI Revolution in 2025
- Editor
- Dec 28, 2024
- 1 min read
What's New: Adams Street Partners' 2025 outlook forecasts a broad resurgence in private equity deal activity and exits, driven by stabilizing interest rates, improved credit conditions, and accelerating artificial intelligence investments.
Why It Matters: After subdued activity in 2022-2023, the anticipated revival could unlock a significant backlog of deals and distributions, potentially reshaping portfolio management strategies across private markets while opening new opportunities in emerging technologies.
Big Picture Drivers:
Post-pandemic normalization is creating more stable business performance metrics, reducing uncertainty that has constrained deal-making
Private credit markets are offering historically better yields and creditor protections, especially in the core middle market
Growth equity is positioned for a significant surge focused on generative AI applications across industries, from healthcare to cybersecurity
By The Numbers:
Exit value forecast to reach $396 billion in US markets in 2024, exceeding pre-Covid levels
US private equity managers currently hold an eight-year inventory of companies at current exit pace
Venture capital deal activity projected to hit $175.2 billion in 2024, surpassing pre-COVID benchmarks
Key Trends to Watch:
Secondary market transactions expected to reach record volumes as portfolio management tool adoption grows
Co-investment strategies gaining prominence as investors seek fee-efficient private equity exposure
Early-stage AI-native companies likely to dominate fundraising across technology stack, from infrastructure to applications
The Bottom Line: While competition remains intense and interest rates elevated compared to the past decade, 2025 presents compelling opportunities for private market investors — particularly those focusing on sectors benefiting from technological disruption, with returns increasingly dependent on fundamental revenue growth and operational improvements rather than financial engineering.
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