Sovereign wealth fund private market deals soar, pension fund activity slows

Global sovereign wealth fund investment activity rose sharply in 2025, outpacing pension funds, whose involvement decreased in a reverse from 2024’s pattern.

As of December 17, the aggregate transaction value for SWF-backed deals reached $199.9 billion, marking a 198.4% increase from the 2024 full-year value of $66.99 billion, according to S&P Global Market Intelligence data. Deal volume was up 12.78% year-on-year to 150 from 133 in 2024.

In contrast, the value for pension-backed deals declined by 5.46% to $74.31 billion, down from the 2024 full-year total of $78.60 billion.

The charts include all SWF and pension fund investment activities, encompassing both public and private markets, with or without private equity involvement.

More mature SWFs are active in co-investments and direct investments and are favoring buyouts over venture capital and growth equity investments, said Sebastien Lamy, Bain & Co.'s Asia Pacific head of private equity.

Nine of the top 10 largest SWF deals in 2025 were co-investments with private equity firms. The largest deal was a leveraged buyout involving the Public Investment Fund, Silver Lake Technology Management LLC, and A Fin Management LLC, which acquired Electronic Arts Inc. for $55.2 billion.

SWFs were most active in the technology, media and telecommunications sector, with an aggregate transaction value of $126.23 billion, marking a 466.82% increase from 2024's $22.27 billion.

Pension funds focused on the energy and utilities sector, which often involve large deals. Transaction values in the sector rose 195% to $31.21 billion from $10.58 billion last year.

Technology, media and telecommunications and energy and utilities sectors have historically been among the top three industries for pension funds and SWFs, according to Lamy. However, defensive industries such as healthcare and advanced manufacturing and services are also becoming increasingly popular.

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Jeff Collins, managing partner at asset management firm Cloverlay Investment Management LLC, said institutional investors' interest in private markets is driven by the need to access emerging assets like intellectual property and early-stage AI technologies that are not yet available in public markets.

Lamy forecasts increased allocations to private equity in 2026, driven by new Middle Eastern and Asian sovereign wealth funds entering the private investment market.

In February 2025, the Philippines' first sovereign wealth fund, Maharlika Investment Corp., announced its initial venture into private markets through a partnership with Thailand's Charoen Pokphand Group Co. Ltd. to establish a private equity fund with a $1 billion target.

Newer allocators, whether SWFs or pension funds, are likely to favor buyouts, co-investments, and secondaries, which offer "greater control, downside protection, and transparency," said Lamy.

New funds are likely to increase co-investments and selectively engage in direct deals, particularly in India and Japan, where growth visibility and governance are strong. Allocations toward venture capital will likely be more skewed toward later-stage opportunities, Lamy added.