Private equity exits tilted toward trade sales in H1 2025

While private equity exits via trade sales were down slightly in the first half of 2025, corporate acquirers continued to strike deals with private equity fund managers scrambling to monetize aging portfolio company investments.

Exits to corporate strategics totaled 1,191 in the first half, down 3% from 1,231 trade sales during the same period in 2024, according to S&P Global Market Intelligence data. By comparison, first-half IPOs of private equity portfolio companies, another key exit route, fell 31% from the year-ago period.

After several years of relatively slow exit activity, private equity fund managers face growing pressure to cash in aging investments and return capital to their investors. Corporate acquirers turned that dynamic to their advantage, said Scott Voss, a managing director at HarbourVest Partners LLC.

"The strategics are active, and they're taking advantage of the lack of competition from other liquidity sources," Voss said.

Strategic advantage

Corporates tend to move more slowly than private equity firms in M&A transactions. Despite this, corporates are benefiting from a complex and rapidly shifting macroeconomic environment that has restricted the competition, said Jason Strife, head of junior capital and private equity solutions for Churchill Asset Management LLC, a lender to private equity-owned businesses.

"Strategics probably do better in a market like we have now, simply because private equity buyers aren't moving as fast as they typically do," Strife said.

Strong public market performance also means corporations "certainly have cash to pay for acquisitions," Strife added.

– Download a file of raw data from the story. – Catch up on bankruptcy filings by US-based private equity portfolio companies in the first half of 2025. – Read about US pension funds' private debt allocation shortfall.

Largest exits

During the first half of the year, six of the 10 private equity exits with the largest reported transaction values were sales to corporate acquirers. That includes the top deal on the list: the $18.08 billion deal that merged brokerage Haitong Securities Co. Ltd. with Guotai Junan Securities Co. Ltd., forming Guotai Haitong Securities Co. Ltd. Haitong Securities was backed by Shanghai Guosheng Group Co. Ltd., China CITIC Financial Asset Management Co. Ltd. and Qilu Zhongtai Private Equity Fund Co. Ltd.

Pause button

Voss said optimism for an uptick in exit activity was high at the start of 2025, especially after 2024 finished with a greater than 9% increase in the number of global exits. Expectations that momentum would carry into 2025 were dashed when US tariff policy rattled global M&A markets and private equity dealmakers.

Exits via trade sales quieted in the second quarter as global markets digested the impact of US tariffs. The number of portfolio companies sold to corporate acquirers and the value of those deals declined in the April–June period compared with the prior three months.

IPOs were a relative bright spot in the exit market, with the second quarter's $8.98 billion in global private equity-backed IPOs representing the best quarterly mark since the first quarter of 2024.

"April 2 hit and everyone pressed pause for a period of time," Voss said, referring to the date President Donald Trump imposed a new round of tariffs on key US trading partners.

The pause in deal activity only increased the pressure fund managers are feeling to make exits and increase the flow of capital back to investors, whose distributions from private equity investments have slowed in recent years.

One source of relief has been the secondary market, where private equity fund stakes are bought and sold, typically at a discount. Secondary deals surged in 2024, but the market is facing a potential mismatch between the demand for deals and the amount of capital available to meet that demand.

The value of private equity secondary transactions totaled $40.14 billion globally through April 30, according to Preqin's latest data.

Outlook

The slow reopening of the IPO window is boosting the outlook for private equity exits in the second half of the year and beyond.

Blackstone Inc. CEO Stephen Schwarzman said on a recent earnings call that the company was preparing several portfolio company IPOs amid a brighter overall picture for exit activity.

Voss said a cut to interest rates in the US, private equity's largest market, would likely boost M&A activity and could be key to unlocking exits. "If you're a patient buyer, wait until you can just borrow 50 or 100 basis points less than what you're able to borrow at today," Voss said.

Josh Smigel, US private equity lead for PwC, said most of his firm's clients are not waiting for significant interest rate cuts.

Clients are more focused on the need for clarity about the Trump administration's economic plans, particularly around tariffs, Smigel said.