Every six months, we take a look at the ratio of private equity investments to exits to evaluate how the market is reacting to macroeconomic trends.
In our report from March, we noted that exits were normalizing to Pre-COVID levels, while new investments had slowed from that same period, signaling a more cautious approach to new deals.
Now with more complete and accurate transaction data from the first half of 2025, we examined more than 42,000 private equity platform investments and 17,000 exits from 2017 through June 2025, seeking signs of how the deal market is shifting more recently.
The data shows a clear market-wide slowdown in the first half of 2025 for both investments and exits, across every deal size category. That is significant, particularly because post-COVID patterns had at a minimum signaled a return to normal for exits.
The drivers of this decline in exits become even more clear when you look at the year-by-year investment-to-exit ratio of all deal sizes in two views: grouped by year, and then grouped by deal size, as seen in the charts below.
Comparing H1-2024 to H1-2025
Because private equity deal flow is seasonal, with a rush to close in Q4, we took a closer look at the first half of 2025 directly with the first half of 2024 for an apples-to-apples view.
Small deals ($0–$50M)
Small-deal buyers saw the sharpest pullback in acquisitions (-44%) and a significant exit decline (-38%) in H1-2025 compared to H1-2024. Their investment-to-exit ratio fell about 10%, showing that acquisition activity slowed even more than exits.
Mid deals ($50M–$250M)
Mid-sized transactions followed a similar pattern with investments off by a third, exits down about a quarter, and a 10% drop in the ratio.
Large deals ($250M–$500M)
Large-deal buyers reduced acquisitions by ~29%, but exits fell even faster (-36%). That imbalance pushed their investment-to-exit ratio up 10%. This isn’t an expansion signal, it’s more likely a reflection of holding assets longer while selectively pursuing new opportunities.
Mega deals ($500M+)
The most interesting shift is at the top end. Mega-deal investments fell just 22%, the smallest drop of any group, but exits collapsed (-43%). That pushed the investment-to-exit ratio up a striking 38%. On the surface, it looks like the bigger players are leaning in, but the reality is different: they’re simply selling far fewer assets. These firms may be intentionally delaying exits, betting that there will be improvements in 2026 for market conditions, lower interest rates, or valuations.
The Bigger Picture
Across all deal sizes, the steep decline in exits points to slower capital recycling in early 2025 compared to last year, which could keep acquisition volumes muted if exit markets remain sluggish through year-end.
Put simply: The first half of 2025 has been a market in pause. Private equity firms aren’t rushing to buy, but they’re even more reluctant to sell. Undoubtedly, the recent changes in tariffs has a significant impact and likely more impactful on the mega-sized deals, which are more prone to source and sell across borders.
Until the exit market thaws, expect measured investment activity, especially outside the mega-deal space where capital depth can absorb a longer hold period.
