Middle-market private equity fundraising slips in 2025 amid fewer exits

Global middle-market private equity fundraising declined for a second consecutive year in 2025, impacted by a challenging exit environment that hampered returns to institutional investors.

Middle-market private equity funds raised $281.77 billion in 2025, down 7% from the previous year. The number of closed funds also fell, to 194 in 2025 from 246 in 2024, according to With Intelligence data.

The analysis examined private equity funds, excluding secondary vehicles, that target core middle-market companies with EBITDA between $10 million and $75 million.

The decline in middle-market fundraising mirrored that of overall private equity fundraising, which fell 11% in 2025.

The fundraising challenge resulted from a lack of portfolio company exits, said Nicholas Pedersen, a private equity-focused partner at law firm Honigman LLP.

"Private equity funds have not been able to sell companies and return the capital to those pension fund [investors]. Those dollars are tied up, and [investors] cannot reinvest until they get their money back," Pedersen said.

The number of private equity exits rose 5.4% in 2025, although total deal value declined 21.2% as fund managers trimmed expectations for long-held portfolio company investments.

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As the challenging exit environment dried up liquidity for reinvestment in new funds, limited partners shifted their attention away from middle-market funds toward more established sponsors with a proven track record, said Lauren Ford, a counsel focused on private fund formation at law firm Bryan Cave Leighton Paisner LLP.

"With what money they have, they need to be more judicious with where they put it and focus on [funds with] proven track record to justify those new investments," Ford said.

Largest funds

Veritas Capital Fund Management LLC raised $14.4 billion at the close of Veritas Capital Fund IX LP, the largest middle-market private equity fund in 2025. The fund invests in technology and government-aligned businesses.

Thoma Bravo LP raised $8.1 billion at the close of Thoma Bravo Discover Fund V, the second-largest fund of 2025. Thoma Bravo's Discover fund series focuses on middle-market buyouts of software and technology companies.

Great Hill Partners LP had the third-largest fund with the close of Great Hill Equity Partners IX LP, which secured $7 billion. The Great Hill fund focuses on middle-market growth buyouts across the software, financial services, healthcare, consumer and business services sectors.

Outlook

Middle-market fundraising may pick up in 2026 as expected increases in IPOs and other exit opportunities could free up more available capital, Ford said.

"As the market continues to bounce back with respect to exits, you are going to see more exits in the middle market, but it's going to be a trickle more than a waterfall," Ford said.

Even so, middle-market fundraising will continue to face headwinds due to political uncertainty and persistently high interest rates, Honigman's Pedersen said.

"2026 is going to be a year where a lot of the underperforming funds get culled from the herd and are not able to re-up and continue into 2027 and beyond," Pedersen said.

With Intelligence is a part of S&P Global Market Intelligence.