Key Trends in Private Equity Fundraising for Q3 2025

PE fundraising serves as a key indicator of investor sentiment and capital allocation strategies. Changes in fundraising activity reflect the broader shifts in market confidence and risk appetite. This September 2025 edition of the PE Fundraising Report provides an in-depth analysis of trends in deal activity, fund sizes, regional dynamics, and fund strategies, along with insights into top-performing funds and the overall industry outlook.

Summary

- Decline in Fundraising: PE firms raised USD 456.0 Bn across 532 deals in YTD 2025 (as of September), reflecting a 22.9% decline in value and a 13.5% decrease in deal volume compared with the same period in 2024. Delayed payouts to limited partners (LPs), a strong equity market performance, and ongoing political challenges constrained new commitments and slowed fundraising momentum. 

- Shift Toward Smaller Funds: Fundraising by small funds (under USD 500 Mn) grew 17.3% year-over year in YTD 2025, supported by flexible options and faster execution timelines. In contrast, fundraising by mega (USD 5 Bn+), mid-sized (USD 500 Mn–1 Bn), and large (USD 1–5 Bn) funds declined by 37.2%, 13.2%, and 7.4%, respectively, as institutional investors deferred new investments and scaled back large ticket commitments amid tight market conditions. 

- Regional Trends: PE fundraising contracted across all major regions in YTD 2025, with emerging markets experiencing the sharpest declines. North American firms raised USD 279.7 Bn, supported by large funds and institutional investors. However, trade uncertainties tempered growth. European firms raised USD 137.8 Bn, marking a 22.9% decline amid macroeconomic headwinds that weighed investor commitments. Asia and other regions recorded sharp drops of 34.8% and 56.6%, respectively, primarily due to regulatory hurdles, uncertain government policies, and a slowdown in deal activity. 

- Fund Allocation Trends: Funds raised by turnaround funds surged to USD 21.9 Bn in YTD 2025, emphasizing a strong focus on restructuring-led strategies. Meanwhile, capital raised by buyout and growth funds declined as investors reduced their interest in traditional deals amid weak deal flow and slow returns. 

- Shortened Timeline: Fundraising duration shortened from 17 months in YTD 2024 to 13 months in YTD 2025.  

PE Fundraising Activity

YTD as of September 2025

In YTD 2025, funds raised by PE firms declined 22.9% in value and 13.5% in volume compared to the previous year. Delayed capital returns to LPs constrained new commitments, while elevated borrowing costs, strong public market performance, and persistent geopolitical and regulatory uncertainties, particularly in the US and China, further dampened investor appetite and weighed on fundraising activity. 

Fundraising by Fund Size

YTD as of September 2024 and 2025 

In YTD 2025, supported by favorable valuations, operational flexibility, and stable earnings, fundraising through small funds increased by 17.3% year on year, enabling faster deal closures despite broader market caution. Funds such as One Equity Partners IX and Great Hill Equity Partners IX were among the key contributors to this growth.

In contrast, funds raised by mega funds fell 37.2% from USD 293.0 Bn to USD 184.1 Bn, as LPs adopted a cautious approach to large-ticket investments. Large platforms such as Thoma Bravo, Blackstone, KKR, and Veritas Capital saw slow fundraising momentum and long closing timelines amid tight liquidity conditions and a weak appetite for multi-billion-dollar commitments.

Fundraising by mid-sized funds declined 13.2%, with capital shifting towards smaller strategies or larger, proven platforms, creating a more challenging fundraising environment for mid-tier players. Meanwhile, capital raised by large funds fell 7.4% despite attracting substantial institutional capital, as many investors deferred new allocations in anticipation of improved liquidity conditions and capital returns.

Fundraising by Region 

YTD as of September 2024 and 2025

In YTD 2025, funds raised by PE firms declined across regions, signaling a cautious investment environment and challenging market conditions. The impact was more pronounced in emerging and smaller markets, while established regions demonstrated resilience.

North America raised USD 279.7 Bn, down 19.8% year-over-year, as tariff concerns slowed capital formation. Despite the decline in absolute value, the region's share of global fundraising increased, supported by strong institutional participation and fund closures led by managers, including Insight Partners, Great Hill Partners, and One Equity Partners, which helped the region remain stable amid weak global activity.

Fundraising in Europe reached USD 137.8 Bn, reflecting a 22.9% decline. Inflationary pressures, elevated interest rates driven by the European Central Bank and other regional bank hikes, energy market volatility linked to the Russia–Ukraine conflict, and tight credit conditions, particularly in Southern and Eastern Europe, restricted capital inflows. 

In Asia and other regions, commitments declined by 34.8% and 56.6%, respectively. This drop was due to political instability across Latin America and Africa, regulatory headwinds, particularly in China's technology, education, real estate, and other key sectors, and weak deal pipelines collectively weighed on fundraising.

Fundraising by Fund Type

YTD as of September 2024 and 2025

Fundraising by turnaround funds reached USD 21.9 Bn in YTD 2025, up from USD 6.6 Bn in YTD 2024, driven by increased allocation toward corporate restructuring strategies. In contrast, capital raised by buyouts and growth and expansion funds declined by 27.7% and 13.3%, respectively, reflecting weak LP appetite for traditional dealmaking amid slow M&A activity and tight financing conditions. 

Fundraising Duration (Months) 

YTD as of September 2024 and 2025 

In YTD 2025, the average fundraising duration fell to 13 months from 17 months in YTD 2024, as fund managers streamlined their approach by engaging existing LPs and setting focused fundraising targets, thereby accelerating fund closures. 

Top PE Funds

Largest PE Funds Closed in YTD 2025 (By Fund Size) 

YTD as of September 2025 

Outlook 

Private equity fundraising is poised to stabilize in Q4 2025 after a muted third quarter, supported by easier monetary conditions and early signs of recovery in investment performance. Improving liquidity and narrowing valuation gaps are expected to revive deployment activity, while elevated dry powder levels will give managers added flexibility to pursue attractive opportunities and rebuild fundraising momentum. 

Investors' appetite will remain uncertain. LPs are likely to favor managers with strong records, disciplined investment frameworks, and clear value-creation strategies. Small, sector-focused funds may continue to outperform in fundraising cycles due to faster deployment and sharper thematic focus, while mid-market funds stand to benefit from strategies aligned with evolving LP priorities. Large funds should see a slow but steady recovery as financing markets normalize. However, timelines may remain extended amid tighter allocation of management by investors. 

Regionally, North America is expected to lead the rebound, supported by a healthy deal flow across growth and buyout strategies. Europe should see steady improvement as macro indicators stabilize, and sentiments recover. Asia, however, may remain mixed, with activity concentrated in resilient, high-growth markets such as India and Southeast Asia amid broad policy and political uncertainties. 

Beyond 2025, the fundraising environment is set to be more flexible and diverse. Evergreen and semi-liquid structures, co-investment avenues, and dynamic capital-deployment models are likely to gain traction. At the same time, rising participation from private wealth channels, enabled by digital distribution platforms and advisory networks, will broaden the investor base and strengthen capital formation over the medium term.