Private Equity Anticipates Accelerating Deal Activity — BDO Report

Fund managers and operating partners see prime buying opportunities ahead

CHICAGO--(BUSINESS WIRE)--BDO’s 2025 Private Equity Survey reveals that nearly half of fund managers and operating partners (41%) are prioritizing dry powder for new platform investments as private equity looks to rebound from a down period in M&A activity.

To understand the impacts of tariffs on private equity deal strategies and priorities in the second half of 2025 and into 2026, BDO USA polled 435 fund managers and operating partners — 335 before the Trump Administration’s “Liberation Day,” and an additional 100 after “Liberation Day” to see how their outlook changed.

While geopolitical tensions and macroeconomic headwinds remain, BDO’s research shows that PE firms are proactively preparing to transact when the time is right.

Report Highlights:

• Funds Aim to Deploy Dry Powder to Rev Up & Revive Deals: 41% of funds are prioritizing their dry powder for new platform investments while 27% are focusing on distressed investments.
• Pressure to Exit Builds as Holding Periods Extend: 63% report their fund’s average holding period is 5 years or more, and 84% of fund managers and their operating partners report their average holding period increased over the last year.
• Cash Flow is King Amid Market Uncertainty: Private equity funds consider cash preservation more critical than ever, with 39% — up 16 percentage points from pre-Liberation Day — reporting managing cash flow as the most impactful value creation lever in the next 12 months.
• Firms Turn Focus to Portfolio Revenue Growth. As holding periods stretch, 58% of fund managers plan to prioritize revenue growth for their portfolio companies in the second half of 2025.

"The ups and downs of private equity deal activity in the last few years have resembled a rollercoaster ride," said Patrick Donoghue, BDO's Private Equity National Leader and Managing Principal. "While market volatility has tested the resilience of fund investors, it has also sharpened their focus on what truly drives value. Times like these present some of the best buying opportunities.”

As private equity continues to grapple with challenging market conditions and increased competition from strategic buyers and sovereign wealth funds, the industry is operating with increased clarity. Trade negotiations are progressing, the tax cut bill was signed into law, interest rate reductions are possible, and private equity dealmaking fundamentals remain stronger than ever. Funds are demonstrating confidence in their ability to deploy capital effectively, with equity emerging as a preferred financing source for acquisitions (30%).

"Private equity continues to show resilience and is setting the stage for a new chapter of dealmaking,” added Donoghue. “Those who have used this time wisely will be the first to capitalize as deal activity gains momentum in the second half of 2025 and into 2026. With the pent-up demand, we will not be surprised if deal activity rivals the highs of 2021.”

To read the full 2025 BDO Private Equity Survey, download the report here.

Methodology

BDO’s 2025 Private Equity Survey polled 335 U.S. PE fund managers and operating partners from March 13–25, 2025 before the Trump Administration’s “Liberation Day” announcement to understand their strategies as well as the opportunities and challenges on the horizon for the remainder of the year. From April 23–24, 2025, BDO polled an additional 100 PE fund managers and operating partners to see how their outlook changed. The survey was conducted by Rabin Roberts Research.

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