Private equity market analysis: US, UK and Europe in 2025

As we enter the second half of 2025, the private equity (PE) markets in the US, UK and Europe present distinct dynamics. The US leads with robust deal activity and a strong IPO pipeline, outpacing the UK, which faces a cautious recovery amid economic and geopolitical challenges. Europe shows resilience, surpassing the UK in deal volume and sector diversity but trailing the US in scale and liquidity. For General Counsels (GCs), understanding these trends is critical for managing risks, navigating regulatory landscapes, and driving value creation.

Comparative analysis of regions

United States: Powerhouse of PE

The US PE market continues to thrive in 2025, driven by strong activity in technology and healthcare sectors, as noted by EY’s Private Equity Pulse. McKinsey reports a 14% year-on-year increase in global PE deal value to $2 trillion in 2024, with large buyouts (deals >$500M) surging 37% in value, particularly in North America. Significant uninvested capital and a robust IPO pipeline position the US to capitalise on opportunities despite macroeconomic uncertainties.

Europe: Outpacing the UK, trailing the US

Europe presents attractive opportunities, fuelled by infrastructure investments and a strong pipeline for AI and tech-enabled deals, according to McKinsey. Continuation vehicles, with $75 billion deployed globally in 2024 (up 84% year-on-year), and secondaries provide liquidity solutions amid an exit bottleneck, with over 18,000 portfolio companies held beyond four years.

United Kingdom: Facing headwinds

The UK PE market showed cautious optimism anticipating increased deal activity in 2025, particularly in mid-market deals driven by demand for tech-enabled companies with predictable revenues. Rising gilt yields and geopolitical uncertainties have complicated valuations and exits and the IPO market remains weak.

Actionable insights for General Counsels at portfolio companies

The 2025 PE market demands strategic focus from GCs to navigate higher financing costs and drive value. McKinsey emphasises revenue growth and margin expansion as critical priorities. Below are five practical steps to support GCs in this dynamic environment:

Support smooth exits and deal structures

Collaborate with advisors to structure deals effectively, ensuring compliance with regional regulations to avoid delays. Align management incentives with deal objectives to maintain stakeholder support.

Protect technology and AI adoption

GCs must safeguard data privacy and intellectual property while integrating AI. Clear AI policies and monitoring of regulations will enable you to balance innovation and risk.

Navigate regulatory and tax changes

Evolving tax policies, UK listing rules, US trade uncertainties, and Europe’s strict regulations require robust compliance systems. Stay updated on changes to ensure deals and operations remain on track.

Boost business efficiency

As PE firms prioritise operational improvements amid longer holding periods, streamline governance and risk management to align with business goals, enhancing competitiveness and value creation.

Build flexible legal teams

The fast-paced US market and cautious recovery in the UK and Europe demand agile legal teams to handle deal surges and specialised tasks like acquisitions. Interim counsel can address high-demand periods while supporting business-as-usual operations.

The 2025 PE market reflects resilience, with the US leading in scale and opportunity, Europe offering diverse prospects, and the UK navigating cautious recovery. GCs at PE funds and portfolio companies play a pivotal role in driving strategic value creation. For advice on hiring a General Counsel or optimising your legal team for growth, contact: georgiamorgan-wynne@taylorroot.com.