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Private Equity Roars Back With $331 Billion Q3 As Lower Rates Unlock Dealmaking

MarketDash Editorial Team
1 day ago
U.S. private equity just posted its strongest quarter in years, with deal values jumping 38% year-over-year to $331 billion as falling interest rates and disciplined valuations set the stage for an AI-driven 2026.

After months of uncertainty, U.S. private equity is having a moment. Deal activity surged in the third quarter of 2025, proving that when rates ease and confidence returns, the money follows quickly.

Rate Cuts Open The Floodgates

According to a HarbourVest report, U.S. private equity deal value jumped to $331 billion in Q3, representing a 28% increase from the previous quarter and a hefty 38% climb year-over-year. Deal count followed suit, rising 3.7% from Q2 and nearly 12% compared to Q3 2024.

The catalyst? Interest rate cuts in September and October that reduced acquisition costs and made financing considerably more attractive. But here's the interesting part: private equity managers didn't go wild with valuations. The average U.S. EV/EBITDA buyout multiple actually declined to 12x from 12.8x in 2024, bringing pricing closer to pre-pandemic norms. That's discipline in action.

The exit picture tells a more complicated story. While the year started strong, exit value dropped 41% in Q3 compared to Q1, totaling $126 billion. Still, through the end of Q3, U.S. exit values had already exceeded the full-year 2024 total, which suggests the market is finding its footing even if the pace isn't perfectly smooth.

When The Titans Rally Together

Market confidence became visible when private equity heavyweights like KKR (KKR), Apollo Global Management, and Blackstone rallied in unison ahead of widely expected Fed rate cuts. The subsequent stock market performance reflected broader investor enthusiasm for U.S. markets.

Meanwhile, Partners Group Private Equity is preparing one of its largest shareholder-return programs in years, powered by a string of successful exits. Not everything is rosy, though: the continuation vehicle trend hit a speed bump when major financial institutions faced a combined $1.4 billion loss on an investment in a portable toilet rental company. Yes, really.

Big deals are making headlines too. The $55 billion take-private of Electronic Arts (EA) by a global investor consortium underscores both market scale and conviction. Infrastructure investments are accelerating as well, particularly in digital assets and energy transition projects that are pulling in substantial private capital.

Looking Ahead: Liquidity And AI Take Center Stage

The setup for 2026 looks promising. Accelerating dealmaking, the rise of private credit as a core financing source, and strong capital inflows into infrastructure like data centers and energy projects are all converging.

Liquidity will be the defining theme, shifting from short-term stress to long-term structural evolution. Investors are expected to zero in on scalable, differentiated AI platforms, while private markets expand access through new investment vehicles that offer varied liquidity options and lower entry points for a broader investor base. After a rocky stretch, private equity seems ready to sprint into the new year.

Back to Stock Market News

Private Equity Roars Back With $331 Billion Q3 As Lower Rates Unlock Dealmaking

MarketDash Editorial Team
1 day ago
U.S. private equity just posted its strongest quarter in years, with deal values jumping 38% year-over-year to $331 billion as falling interest rates and disciplined valuations set the stage for an AI-driven 2026.

After months of uncertainty, U.S. private equity is having a moment. Deal activity surged in the third quarter of 2025, proving that when rates ease and confidence returns, the money follows quickly.

Rate Cuts Open The Floodgates

According to a HarbourVest report, U.S. private equity deal value jumped to $331 billion in Q3, representing a 28% increase from the previous quarter and a hefty 38% climb year-over-year. Deal count followed suit, rising 3.7% from Q2 and nearly 12% compared to Q3 2024.

The catalyst? Interest rate cuts in September and October that reduced acquisition costs and made financing considerably more attractive. But here's the interesting part: private equity managers didn't go wild with valuations. The average U.S. EV/EBITDA buyout multiple actually declined to 12x from 12.8x in 2024, bringing pricing closer to pre-pandemic norms. That's discipline in action.

The exit picture tells a more complicated story. While the year started strong, exit value dropped 41% in Q3 compared to Q1, totaling $126 billion. Still, through the end of Q3, U.S. exit values had already exceeded the full-year 2024 total, which suggests the market is finding its footing even if the pace isn't perfectly smooth.

When The Titans Rally Together

Market confidence became visible when private equity heavyweights like KKR (KKR), Apollo Global Management, and Blackstone rallied in unison ahead of widely expected Fed rate cuts. The subsequent stock market performance reflected broader investor enthusiasm for U.S. markets.

Meanwhile, Partners Group Private Equity is preparing one of its largest shareholder-return programs in years, powered by a string of successful exits. Not everything is rosy, though: the continuation vehicle trend hit a speed bump when major financial institutions faced a combined $1.4 billion loss on an investment in a portable toilet rental company. Yes, really.

Big deals are making headlines too. The $55 billion take-private of Electronic Arts (EA) by a global investor consortium underscores both market scale and conviction. Infrastructure investments are accelerating as well, particularly in digital assets and energy transition projects that are pulling in substantial private capital.

Looking Ahead: Liquidity And AI Take Center Stage

The setup for 2026 looks promising. Accelerating dealmaking, the rise of private credit as a core financing source, and strong capital inflows into infrastructure like data centers and energy projects are all converging.

Liquidity will be the defining theme, shifting from short-term stress to long-term structural evolution. Investors are expected to zero in on scalable, differentiated AI platforms, while private markets expand access through new investment vehicles that offer varied liquidity options and lower entry points for a broader investor base. After a rocky stretch, private equity seems ready to sprint into the new year.