In conversation with our asset class leaders

The stage for global private markets is set for a year of robust performance and strategic opportunities, albeit against a backdrop of persistent geopolitical tensions and challenges.  As we transition into 2025, we look closely at the macroeconomic trends that have shaped the past year and will continue to influence the private markets.

Pantheon’s investment leadership team provides further insights into these trends and highlights key areas of focus for the coming year, with commentary from our asset class heads in private equity, private credit, and infrastructure.

Key areas of focus for private markets in 2025

1. A more supportive backdrop for dealmaking
   The macroeconomic environment could bring about normalized dealmaking volumes as lower borrowing costs and substantial dry powder have the potential to boost private market deal activity. Although short-term uncertainty emanating from the rising threat of tariffs and other policy changes could delay the pace at which this trend plays out, the reduction of interest rates from recent highs has positively impacted M&A, creating a more conducive environment for deals. In 2024, global M&A deal value had increased by 15% year-over-year.¹ Private equity deal volume in 2024 exceeded $1.5tn, an 11% increase from 2023, though still below the 2021 peak.²
   
   
2. Secondaries to the rescue: poised for sustained growth
   The secondaries market has seen significant growth since our initial investments in 1988. Last year, secondaries volume hit a new record of $160bn³, with record levels for both LP portfolio sales and GP-led opportunities, and in 2025 the demand for liquidity and exits is expected to drive continued strong volume. Factors such as low distributions, aging portfolios, and a recovering exit market position the secondaries market for continued growth
   
   
3. Semi-liquid funds go mainstream
   Semi-liquid funds are growing in popularity and have reached ~$400 billion⁴ in assets largely driven by growing private market allocations from private wealth investors. These funds provide a number of features that make them attractive access points into private markets including immediate NAV exposure, lack of capital calls, and full recycling of distributions helping to maintain an investor’s funded status. These features remove friction for the individual wealth investor but also can have applicability for the institutional investor and overall are broadening investor choice.