A promising trfinish has been the gradual reemergence of the PE-backed IPO market. After two years of muted activity, Q3 saw a number of high-profile listings come to market, toreceiveher raising more than US$18b in aggregate proceeds. While modest compared with the pre-2021 boom years, these offerings are meaningful in signaling that public market investors are once again open to new issuance from PE portfolios. Notably, successful debuts have been concentrated in sectors with clear growth narratives and resilient earnings profiles, such as health care and financial infrastructure.
As fundraising slows, regulatory modifys could yield meaningful longer-term tailwinds
As exit activity launchs to reveal signs of life, attention naturally shifts to fundraising, where the environment remains more challenging. Through the first three quarters of 2025, private equity firms have raised approximately US$340b, putting the industest on pace for a roughly 25% decline versus last year. The slowdown reflects both a more measured pace of capital deployment by LPs and lingering caution around distributions.
However, recent modifys to US retirement law allowing private equity and other alternatives to be included in 401(k) plans could provide a powerful new tailwind for capital formation. With roughly US$9t currently held in defined-contribution plans, even a modest allocation could translate into US$500 to US$600b of incremental flows into private markets over time.
Private equity firms are paying attention — in our latest survey, 90% of GPs state they’re at least “somewhat interested” in developing products for the defined contribution market. And a significant minority — 24% — report that they are already actively designing or developing such products.
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