Private Equity Fundraising Slumps to 5-Year Low in 2025

What’s New

Global private equity fundraising is on track for its weakest year since 2020 — and lowest fund count in over a decade — with just $224.9B raised across 248 vehicles by midyear, according to KPMG’s Pulse of Private Equity Q2’25. The slowdown reflects muted exit activity in recent years, as GPs struggle to return capital to LPs and face tougher fundraising conditions.

Why It Matters

Fundraising is the industry’s lifeblood. A sustained slump signals LP caution, tighter allocations, and a potential shakeout favoring the largest, most established managers. Yet bright spots in certain fund sizes and regions suggest targeted capital is still flowing to strategies with strong narratives.

Big Picture Drivers

• Liquidity Crunch: Years of low exits have slowed capital recycling, limiting LP commitments.

• Selective LP Appetite: Investors favor top-tier GPs and proven sector specialists.

• Regional Pockets of Strength: Mid-market funds in EMA and ASPAC outperform large-cap peers in pace.

• Macro Uncertainty: Tariff, rate, and geopolitical concerns weigh on long-term commitments.

• Competition for Capital: Infrastructure, private credit, and secondaries compete for LP dollars.

By The Numbers

• $224.9B — PE capital raised globally by midyear 2025.

• 248 — Number of funds closed, slowest pace in 10+ years.

• $87.8B — Raised by $5B+ funds in the Americas, all in the U.S.

• $39B — EMA mid-market ($1B–$5B) funds raised, nearly matching 2024’s full-year total.

• Multiple Segments — ASPAC $100M–$1B funds on track to beat 2024 totals.

Key Trends to Watch

• Flight to Quality: LPs double down on established managers with strong track records.

• Fund Size Bifurcation: Growth at the extremes — very large and very small funds — while mid-tier lags in some regions.

• Sector-Specific Success: Healthcare, infrastructure, and AI infrastructure strategies may buck the slowdown.

• Secondaries in Demand: LPs turning to secondary sales to manage portfolio liquidity and make room for new commitments.

The Wrap

Private equity fundraising in 2025 is no rising tide — it’s a test of resilience. Managers with strong sector positioning, differentiated strategies, and proven LP relationships are still closing, but the era of “easy money” is firmly over. Those without a compelling story may struggle to get to a first close.