The private equity and venture capital industries are showing cautious optimism as deal activity and fundraising conditions improve, despite lingering macroeconomic concerns, according to the S&P Global Market Intelligence 2025 Private Equity and Venture Capital Outlook.

A survey conducted for the report found that 71% of general partners (GPs) in private equity and 67% of venture capital GPs have a more positive outlook on deal-making than a year ago. Limited partners (LPs) also anticipate strong returns from private equity investments in 2025. The report highlights the growing role of generative AI in investment workflows, with respondents indicating its use in due diligence, valuation analysis, and deal sourcing.

“While the macroeconomic landscape presents challenges, the overall sentiment within the private equity and venture capital sectors is one of cautious optimism,” Dylan Thomas, lead author for the report, at S&P Global Market Intelligence, said. “In addition, expanding into the retail channel is a focus for both private equity and venture capital firms, with more than two-thirds of surveyed GPs either currently offering or considering access to retail investors.”

Key Findings from the 2025 Outlook:

• Deal Optimism:71% of private equity GPs and 67% of venture capital GPs expressed greater optimism about deal activity than in 2024.
• Fundraising Conditions:44% of private equity and 73% of venture capital GPs reported improved fundraising prospects.
• Retail Access:More than two-thirds of GPs are offering or planning to offer access to non-institutional investors.
• GenAI Adoption:31% of respondents see AI as most useful in due diligence, followed by valuation analysis (23%) and deal sourcing (22%).
• Economic Pressures:Macroeconomic conditions, including interest rates and inflation, remain key factors affecting private market activity, cited by 46% of private equity and 40% of venture capital GPs.
• Private Equity Returns:52% of LPs identified private equity as the asset class likely to yield the highest returns in 2025, up from 39% last year.
• Co-Investment Activity:79% of LPs engage in at least one co-investment deal annually, with over half completing between one and five such deals each year.
• Valuation Concerns:56% of LPs believe company valuations are too high and due for a correction.
• Interest Rate Impact:73% of LPs expect higher interest rates to weigh on future private equity returns.
• GP-Led Secondaries:75% of LPs are skeptical about GP-led secondaries and fund-level financing due to potential conflicts of interest.
• ESG Prioritization:Only 4% of LPs ranked ESG factors as a top priority when evaluating fund investments.

The S&P Global Market Intelligence survey included over 100 private equity, venture capital, and LP respondents from North America, Latin America, Asia Pacific, the Middle East, and Africa. The survey was conducted between November 2024 and January 2025, covering topics such as deal activity, strategy shifts, economic challenges, sustainability considerations, and technology adoption.