Private equity firms hold $1 trillion in unsold assets due to various uncertainties

From Yahoo Finance: 2025-06-18 05:06:00

Private equity firms are holding $1 trillion in unsold assets due to high interest rates, tariff policy uncertainty, and geopolitical risks, leading to a slowdown in dealmaking. LPs are frustrated with delayed returns as firms struggle to profit from assets bought at peak prices, requiring creativity to unlock capital.

M&A activity has remained flat in 2025, with 4,535 deals totaling $567 billion as investors pause or revisit deals due to tariff issues. PwC expects a potential market rebound if the U.S. recession recedes, tariffs become clearer, and interest rates decrease, with LP pressure and asset repricing driving improvement.

The IPO market has shown signs of life, with 31 traditional IPOs raising $11 billion through May and SPACs making a modest comeback. PEs need to navigate uncertain market conditions and get creative to unlock capital, with optimism for improved M&A activity in the future.

Read more: Private equity sits on $1 trillion amid uncertainties, M&A stalls, PwC says