PwC’s Private Equity Trend Report 2025 features an overview of the European private equity (PE) market, along with insights from 250 PE principals based in the region.

Highlights include:

• Dealmaking conditions to improve. After a challenging few years of geopolitical conflict and elevated interest rates, respondents are optimistic about the dealmaking environment in 2025. Over half (56%) expect this to improve, including 9% who believe it will be significantly better. Just 16% expect conditions to worsen.
• Exits on the rise. After a year that saw exits increase in both volume and value terms, firms are focused on realising returns for investors. While 52% are expecting to complete the same number of exits in 2025 as in 2024, a substantial minority (40%) plan to pick up the pace.
• More new deals on the horizon. Nearly half of respondents (46%) expect to make more new investments in 2025 than they did last year, with most of the rest (44%) anticipating a similar investment pace to last year. This follows on from a year when 45% of respondents say their deal-making increased in 2024, with the same proportion saying global conflicts, political uncertainty and protectionism supported their increased activity.
• M&A strategies take centre stage. PE is pursuing an M&A playbook over the coming year. When asked about the kinds of strategies that will increase equity value most in their portfolios, market consolidation is the top response, with 64% mentioning this.
• Fundraising challenges ahead. European PE fundraising has held up well over the past few years, but European general partners (GPs) are bracing themselves for more difficult times. Over two-fifths (41%) say fundraising will be the biggest challenge for their firm in 2025 and over half (53%) say it will be so for the next five years.
• Digital technologies transforming PE firms and their portfolios. The digital transformation of portfolio companies has become absolutely vital for exit outcomes and generating returns, with 83% saying this is important. Nearly three-quarters (71%) invested in digitally transforming their own firm or portfolio company business models in 2024, with artificial intelligence (AI) the main focus for 67% of those that invested. In PE firms, 88% used data analytics and/or generative AI for company valuations; next year, 80% expect to use them for due diligence (up from 65% in 2024).
• ESG contributing to PE returns. Nearly all respondents view environmental, social and governance (ESG) levers as a core part of their value creation story in most cases when assessing buy-side opportunities, including 72% who believe this in all cases.
• Germany remains attractive. Of our respondents, 58% currently have investments in Germany. Among these, almost all (98%) are planning to make future investments in Germany in the next five years, up from 91% in last year’s survey, with 39% expecting to increase the assets they allocate there to increase.

The report is available to download from pwc.de