Private Equity Market Update: Q3-2025
The third quarter of 2025 marked a resurgence in private equity deal activity, accompanied by renewed momentum in global M&A and a cautiously reopening IPO window. Against this backdrop, the secondary market continues to grow, benefiting from several distinct trends — some are cyclical in nature, while many are secular forces driving lasting use and adoption.
Q3 saw an increase in deal flow with deal value rising 28% over Q2 25 and deal count rising modestly over the same period (see Figure 1). After a lull in deal activity in Q2 mainly caused by the tariff disruptions, the market rebounded as clarity improved around policy direction and impact.
The current economic environment should continue to act as a tailwind to further dealmaking, with lower interest rates, less economic uncertainty and resilient economic growth. Combined, we believe this suggests a near-term “return to normal” in terms of exits and overall deal activity.
Figure 1: Global Private Equity Deal Activity1
With this broader context, we observed the following trends in the private equity market during the third quarter of 2025:
A rebound in exit activity and $1.9 trillion in global M&A in the first nine months of 2025 signal renewed market momentum.2
In addition to rising deal activity, global private equity exit values climbed as well. Exits in Q3 2025 totaled approximately $294 billion, a 29% year-over-year increase from Q3 2024.3 The rise was driven by sponsor-to-sponsor sales, secondary transactions and a handful of high-profile IPOs — signaling renewed liquidity across both private and public markets.2
This uptick matters for several reasons. First, it reflects reduced hesitation among sponsors to monetize mature investments. Second, improved liquidity and exit momentum feed the “flywheel of PE” by enhancing distributions and enabling LPs the ability to invest more capital in the asset class. Third, the resurgence of exit activity signals that buyers and sponsors are finding greater alignment on valuations, which should bolster the broader M&A pipeline.
This upswing in market confidence fueled global M&A values to reach $1.9 trillion, up 10%, year-over-year, with North America leading the gains. While still below 2021–2022 highs, we observe an important step-up from 2023 and 2024 (see Figure 2).
Figure 2: Global M&A Activity2
Private equity secondaries continue to gain momentum, underscoring their expanding role within the broader PE ecosystem
The secondaries market continues to experience record volumes, with 2025 expected to reach another all-time high following the record-setting $162 billion of total transaction volume in 2024 (see Figure 3). The secondaries market has matured into a distinct and durable segment of private capital — defined not just by scale, but by its expanding range of participants and transaction types. Secondary solutions are now an integral part of portfolio management for both LPs and GPs.
LPs are turning to the secondary market to manage liquidity and rebalance their portfolios. GPs are leveraging the continuation vehicle (CV) market to hold assets with more growth potential for longer and provide liquidity to existing investors. With over 155 sponsors being repeat users of the CV market, CVs have evolved from a niche liquidity solution into a standard mechanism for extending ownership and optimizing exit timing across the portfolio. In 2025 year-to-date, 16% of total private equity exits were driven by CVs, compared to just 5% in 2019.5
Figure 3: Total Secondaries Transaction Volume6
Figure 4: Secondary Turnover Rate7
Despite record growth in the secondaries market, volumes remain quite low compared to total global private equity net asset value (NAV). The secondary turnover rate — measured as secondary transaction volume as a percentage of total private equity NAV — is growing but remains below 5%, reaching 2.12% in 2024, up from 1.22% in 2020 and 1.52% in 2023 (see figure 4). This steady increase underscores a more systematic and programmatic approach by both GPs and LPs; however, there appears to be much more room for growth in this market.
The gradual unwinding of surplus private equity NAV is expected to remain a long-term driver of secondary market demand. However, even as exit activity returns to normal, the secondary market should continue to grow as it evolves into a core portfolio management tool, providing price discovery, rebalancing opportunities and greater flexibility for both LPs and GPs.
Looking ahead, the rebound in exit activity and ongoing growth of the secondaries market indicate a healthier, more liquid private equity ecosystem. As exit realizations accelerate, and CVs become more prevalent, both LPs and GPs are expected to be better positioned to manage capital deployment, optimize portfolio construction and sustain long-term value creation.
Endnotes:
With respect to any trends highlighted in the charts associated with this mailer, please note there can be no assurance that such trends will continue in the future.
- Global Private Equity Deal Activity Source: Pitchbook, Q3-25 Global PE First Look, November 2025.
- Global M&A Activity: Boston Consulting Group, 2025 M&A Report, October 2025.
- Global Private Equity Exit Activity Source: Pitchbook, Q3-25 Global PE First Look, November 2025.
- Continuation Vehicle Market: PJT Partners, Q3 2025 Secondary Market Insights, October 2025.
- Continuation Vehicles as a Percent of Total Exit Volume: PJT Partners, Q3 2025 Secondary Market Insights, October 2025.
- Total Secondaries Transaction Volume: Jefferies, H1 2025 Global Secondary Market Review, July 2025.
- Secondary Turnover Rate: Northleaf analysis, Secondary market volume data from Jefferies – Global Secondary Market Review (2003–2024). Private equity NAV data from Preqin.
Important Notices:
This document is for informational purposes only and does not constitute a general solicitation, offer or invitation in any Northleaf-managed product in the United States or in any other jurisdiction and has not been prepared in connection with any such offer. The views and opinions expressed herein do not constitute investment or any other advice, are subject to change, and may not be validated by actual events. There can be no assurance that any of the trends highlighted above will continue in the future, Certain of the information set forth herein was gathered from various third-party sources which Northleaf believes to be accurate but has not been able to independently verify.
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