""While it's a really nice rebound, you really need to see that momentum sustained in the year ahead to make up for that lost time from 2022 through 2024," said Kyle Walters, PitchBook private equity research analyst. "A lot of sponsors remained on the sidelines, waiting for what they deemed to be a better exit environment, and now it finally seems that that exit environment has arrived.""
""We kind of call it the success of the few and the challenges of the many," he said."
""ARR is not materializing""
Private equity recorded a strong rebound in exits in 2025, totaling just over 1,600 exits and nearly $730 billion in exit value, the second-highest year behind 2021. Fundraising declined, with 2025 marking the weakest capital formation since 2020. Many sponsors paused activity from 2022–2024 and are now returning as exit conditions improve, concentrating success among a limited group of firms while others struggle to raise new funds. The mismatch between rising exits and poor fundraising creates pressure on rapidly maturing PE-backed companies to find timely exits. Software (where ARR growth is underperforming) and energy are notable sectors to watch.
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