After 15 years of ultra-low interest rates, the private equity (PE) sector has had to adjust to more normal borrowing costs over the last three years – and to endure a period of almost constant geopolitical volatility, economic turmoil and industry upheaval.

Against such a backdrop, this report provides crucial context on where the PE market stands today. It includes insights from a survey of 100 senior PE executives in Asia, Europe and the U.S. on how they are overcoming today’s challenges and setting themselves up for success amid demanding market conditions and industry shifts.

Key findings include:

• U.S. elections. 31% of North American respondents believe that the Republican victory in November’s U.S. presidential election has the potential to boost portfolios, particularly for North American firms.
• Fundraising. 43% of respondents highlight anxiety over geopolitical issues as the biggest obstacle to fundraising.
• Exits and liquidity. 68% of respondents believe market conditions for liquidity events will be unfavorable over the next 12 months, despite an upturn in exits in the latter part of 2024. This compares to 42% from last year’s report. However, despite this somewhat downbeat assessment, exit activity has begun to increase in Q4.
• Challenges. 34% of respondents (up from 25% in last year’s survey) feel that relatively weak economic growth is the biggest challenge facing the sector overall.
• Co-investment. 60% of respondents globally now offer a co-investment program; in North America, 73% of firms offer co-investments.
• Private credit. 63% of respondents use private credit to support acquisition financing in their portfolios. Asset-backed securities (ABS) and other structured products are in use at 59% of global PE firms.
• Deal trends. 61% of respondents describe club deals as very appealing in the current environment. This is up from 46% last year.

The report is also available at dechert.com.