Private equity exit count grew in Q3 as transaction sizes shrank

A shift toward smaller deals in the third quarter coincided with one of the busiest quarters for global private equity and venture capital exit activity in nearly four years.

The number of private equity and venture capital exits globally reached 817 in the third quarter, a more than 4% increase from 784 in the second quarter, according to S&P Global Market Intelligence data. It was the second-highest quarterly exit total recorded since the fourth quarter of 2021, a year when global exit activity peaked.

Even as the number of exits increased, disclosed transaction values declined to $78.68 billion in the third quarter, down 24% from $103.70 billion in the prior quarter.

Together, the slight uptick in exit volume and the more significant decrease in exit value mean the average exit transaction produced a smaller return for its private equity sponsor in the third quarter compared to the first half of the year. That was particularly true of exits via trade sales, which this year have produced returns well below the prior four-year average, even as returns from IPOs and secondary sales increased over the prior four-year average.

The shift indicates that fund managers may be lowering exit return expectations for portfolio companies, which have experienced years of elevated interest rates , rising global trade tensions and macroeconomic uncertainty.

"Those harder-to-do deals are getting done a little more," Robert Koven, co-CEO and managing director of M&A advisory Jegi Leonis, said in an interview.

Exit backlog

With 2,360 private equity and venture capital exits recorded globally through the first three quarters of 2025, the industry remains on track to produce more exits this year than the 2,991 exits of 2024, according to Market Intelligence data. But exit value, which totaled $286.08 billion this year as of Sept. 30, is still well short of the $473.27 billion recorded in 2024 and pacing for its lowest total in at least four years.

Private equity and venture capital firms are still working their way through a backlog of long-held portfolio company investments that has built up since the global rate hiking cycle of 2022, which depressed corporate valuations and prompted fund managers to delay exits. Private equity has no problem finding buyers for premium assets — typically companies with wide, defensible business moats and resilient revenue streams — but exits are slow for most everything else, according to Joe Donohue, vice chairman of DC Advisory US.

"There's been a real bifurcation in the market of what I consider A-plus assets being sold by private equity firms and maybe the C-minus ones. Not a lot in between," Donohue said in an interview.

– Scan the latest private equity headlines – Catch up Q3 2025 private equity entry activity – Download a file of raw data from this story

Donohue said that started to change, at least in the US, after the end-of-summer Labor Day holiday, with sales processes spinning up for more of those portfolio companies that are midrange performers.

"There's still a boatload of portfolio companies that need to get sold," Donohue said.

According to Donohue, the managers best prepared to navigate the difficult exit environment have cultivated ties with potential strategic acquirers for portfolio companies. With AI threatening to disrupt an array of industries, a well-defined AI strategy is critical for closing exit transactions, he added.

The $22.96 billion sale of JAB Holding Company S.à.r.l.-backed coffee and tea company JDE Peet's NV to Keurig Dr Pepper Inc. was the largest exit deal completed in Q3.

Private equity industry consolidation

Speaking to a conference audience in September, Apollo Global Management Inc. President James Zelter predicted that the challenging exit environment would linger, endangering some private equity funds. Fund managers who overpaid for acquisitions ahead of the exit slowdown will struggle to return capital to investors, damaging their ability to raise future funds, Zelter said.

“I don't expect a massive monetization cycle to hit. I think there's many, many [private equity] funds that are out there that have raised their most recent fund and don't realize it's their last fund," he said

Koven of Jegi Leonis agreed with that assessment, predicting the largest private equity firms would continue to expand their market share while smaller players learn to exploit niche strategies, consolidate or disappear.

"It's just the natural process of an industry that's ultimately becoming more mature," Koven said.