US Private Equity Market 2025–2034

Reports Description

The US Private Equity Market is forecast to grow at a CAGR of 8.54% from 2025 to 2034. The market is expected to reach USD 1,874 Billion by 2034, up from USD 828 Billion in 2025.

Overview

This growth is powered by increasing institutional dry powder, digital technologies that are positively affecting deal flow, and a regulatory environment that broadens the pools of accredited investors. This growth also coincides with generational business transitions and energy transition mandates supporting additional buyout opportunities. Challenges remain, including rising interest rates and greater regulatory scrutiny. However, the market position is solid and geared to grow substantially through innovation and strategic investments.

Key Trends & Drivers

The US Private Equity Market Trends have tremendous growth opportunities due to several reasons:

• Increase in Dry-Powder Levels from Institutional Allocations: Institutional investors are allocating more capital into private equity, creating additional “dry powder.” This available liquidity allows firms to pursue larger transactions, invest in various sectors of the economy, and act quickly on business opportunities to create sustainable growth and continued transaction volume.

• Digitization—Global Deal Flow in Technology & Services: Digital solutions, such as artificial intelligence and data analytics, help firms with their sourcing and due diligence, making the quality of transactions better overall and faster. These digital technologies enable firms to find more deal flow, especially in tech-enabled services, allowing firms an advantage when considering new opportunities, which opens new avenues for investment.

• Generational Succession with Buy-out Targets: As many mid-market family-owned businesses transition in leadership, these businesses have a founder aged 60 or older. This transition period presents PE firms with options for a positive buyout opportunity as they look to acquire established businesses, enhance operations, and explore growth avenues in transition periods of ownership.

• SEC Marketing Rule Relaxations: The relaxation of the SEC marketing rules has just approved the expansion of the definition of what an accredited investor could be, allowing new individuals and entities to invest in PE funds. The increase in available capital means new fundraising capabilities and potential market activity.

Key Threats

The US Private Equity Market has a number of primary threats that will influence its profitability and future development. Some of the threats are:

• Increased Interest Rates Raise Financing Expenses: Rising interest rates mean higher expenses for leveraged buyouts since debt financing costs have increased as a result, which can mean various things: less volume of deals, lower returns, or inability to effectively deploy large acquisitions.

• Increases in Regulatory Scrutiny: With increased scrutiny from regulatory bodies like the SEC, rules around fee transparency, trade-offs of risks, and ESG fees make it complicated and more expensive to operate thus, private equity firms spend more time building compliance options, impacting profitability and speed of execution on competitive deals.

• Competition from SPACs: SPACs and conventional corporate strategic buyers have created higher competition, quickly rising valuations, an inability to support any entry multiples, and severe disruption of private equity firms’ calculation of risk-return on investments.

Category Wise Insights

By type of fund

• Buyout Funds: Specialize in buying businesses and usually take a majority stake, applying leverage across the business to improve operations and look for growth.

• Growth Equity: Look to invest in established businesses with growth potential to help them scale and find market penetration without significant dilution of existing equity holders.

• Venture Capital: Invest in startups and early-stage companies in the seed or first stage of development, with the potential for real innovation, primarily in technology or disruptive sectors.

• Mezzanine and Preferred Equity: Provide financing with a mix of debt/equity/fixed income and are commonly mixed and structured as part of funds financing buyouts or growth expansions.

• Distressed and Turnaround Funds: Look to invest in poor-performing, sometimes financially distressed assets to reorganize and turn the business around.

• Infrastructure and Energy Transition Funds: These funds aim to invest in infrastructure projects and renewable energy assets with a sustainability outcome.

By industry sector

• Technology & Software: The Technology & Software sector includes companies focused largely on software, cloud, artificial intelligence, and aspects of digital transformation.

• Healthcare & Life Sciences: The healthcare and life sciences sector represents pharmaceutical, biotechnology, medical device, and health care service business segments; the accompanying flows of innovation and trends that support these segments, as well as the trends accompanying an aging population.

• Consumer & Retail: The consumer & retail sector includes brands, e-commerce, and big box retail that struggle to pivot or reposition their strategy to shift based on changes in consumer preferences and behaviors.

• Industrial & Manufacturing: The Industrial & Manufacturing sector includes companies focused either on improving efficiencies in their production processes or modernizing their production capacity to meet consumer changes.

• Financial Services & FinTech: The financial & FinTech sector attempts to combine traditional finance with today’s modern technology and innovation.

• Energy, Power & Utilities: The Energy, Power & Utilities sector includes the traditional and renewable energy companies involved in the energy transition.

Impact of Digital Disruption and Regulatory Shifts

The US Private Equity sector is undergoing a revolution in light of external influences like rapid digital disruption and a changing regulatory environment. Technology advances in artificial intelligence (AI), machine learning, and analytics are changing the landscape in deal sourcing, due diligence, and portfolio management. These technologies permit firms to quickly identify all potential investment opportunities, gain deeper insights into due diligence risks, and rapidly implement operational efficiencies within portfolio companies to deliver improved returns. As the US economy digitizes, stakeholders, investors, regulators, and organizations themselves all demand increased transparency and quicker decision-making, thus creating great opportunities for firms with a tech-forward approach to development.

On the regulatory front, there are emerging opportunities to access pools of capital through accredited investors and increased access and understanding of respective governance, reporting, monitoring, and new rules around marketing. For the PE space, the SEC’s relaxed marketing restrictions significantly expanded the pool of accredited investors that firms can solicit for secured capital. However, harsher penalties and stricter regulations around governance and reporting for management fees related to firms’ continued compliance and the future capital-raising opportunities that underscore ESG compliance to abide by new regulatory pressure may inflate costs for management. While these regulations focus on protecting investors and encouraging responsible investing in terms of ESG, they all require increased governance and reporting each time.

Technological disruption and regulatory modifications would provide emerging opportunities and associated challenges for the PE community while forcing them to innovate or adapt to core elements of their growth model. If robust compliance were doubtful to emerge, the risk of falling behind would loom larger for PE firms continuing to lag behind rising regulatory pressure. Nevertheless, the confluence of digital disruption and regulatory transformation will continue to support the evolution of the US PE model to produce increased levels of innovation, accountability, and engagement with investor bases.

Report Scope

Regional Perspective

The US private equity market has regional variations in geography, with key metropolitan areas driving deal flow and capital activity. The Northeast region, anchored by New York City, Massachusetts, and Pennsylvania, represents the largest and most established PE market in the country and is characterized by an extensive network of institutional investors, leading financial services firms, and a more developed healthcare and technology ecosystem, making it a key area for legal and advisory services, buyouts, and venture capital events. The Midwest region includes Illinois, Ohio, and Michigan and has many strong industrial and manufacturing companies, allowing PE firms to focus on operational improvement opportunities in many traditional industries. The South region is anchored by Texas, Florida, and Georgia and has benefited from rapid acceleration of growth capital and PE deal activity, driven largely by technology, energy, and healthcare investment potential in attractive business environments and expanding urban centers.

The U.S. West Coast region, especially California and Washington, is still the global leader for technology and innovation and has a significant market for both venture capital and growth equity mandates, especially for software, biotech, and clean technology investments. In addition, emerging markets in the secondary markets in each of the regions demonstrated interest due to lower cost structures and relative development—these have, in many ways, benefited from accelerator and incubator programs. Overall, the regional differences in sectoral focus, size of deals, and type of investors provide PE firms with opportunities to balance out their portfolio and optimise their returns from the various local development opportunities.

Key Developments

• Blackstone Inc. – Growth of Investment in Technology Enabled Services (2024): In 2024, Blackstone has greatly increased investment in tech-enabled services, including technology and using technology for operational efficiencies in its investments. The firm has made acquisitions in AI-driven analytics and cloud computing service providers. Blackstone has become a leader in tech-focused private equity investing.

• KKR – Fund Launched to Invest in ESG (2025): KKR has launched a new fund to invest in ESG (Environmental, Social and Governance), intended to invest in sustainable infrastructure and renewable energy type projects. The fund launch is a strategic move by KKR to begin addressing investor appetite for responsible investing but also will put KKR in the position to grow with energy transition mandates, which are growing in the marketplace.

• The Carlyle Group – Strategic Partnerships with FinTech Innovators (2024): The Carlyle Group worked with various FinTech innovators and entered into new strategic partnerships to integrate analytic processes and AI into their portfolio management practices. The partnership will enhance their order sourcing and due diligence capabilities and will allow the firm to develop imaginative and innovative collaboration going forward regarding their financial services investments.

Leading Players

The US Private Equity Market is highly competitive, with a large number of product providers in Malaysia. Some of the key players in the market include:

• Blackstone Inc.
• Kohlberg Kravis Roberts & Co. L.P. (KKR)
• Apollo Global Management Inc.
• The Carlyle Group Inc.
• TPG Inc.
• Bain Capital LP
• Vista Equity Partners
• Thoma Bravo LP
• Silver Lake Partners
• Warburg Pincus LLC
• Advent International Corp.
• Clayton Dubilier & Rice LLC
• Hellman & Friedman LLC
• Leonard Green & Partners L.P.
• Oak Hill Capital Partners
• Ares Management Corporation
• Brookfield Asset Management Ltd.
• GTCR LLC
• Madison Dearborn Partners
• Providence Equity Partners
• Others

These firms apply a sequence of strategies to enter the market, including innovations, mergers, and acquisitions, as well as collaboration.

The US Private Equity Market is segmented as follows:

By Fund Type

• Buyout Funds
• Growth Equity Funds
• Venture Capital Funds
• Mezzanine & Preferred Equity Funds
• Distressed/Turnaround Funds
• Infrastructure & Energy Transition Funds

By Sector Focus

• Technology & Software
• Healthcare & Life Sciences
• Consumer & Retail
• Industrial & Manufacturing
• Financial Services & FinTech
• Energy, Power & Utilities

By Deal Size

• Small-Cap (< USD 100M EV)
• Mid-Cap (USD 100M – USD 1B EV)
• Large-Cap (USD 1B – USD 5B EV)
• Mega-Deals (> USD 5B EV)

By Investor Type

• Pension Funds
• Insurance Companies
• Endowments & Foundations
• Funds of Funds
• Family Offices & HNWIs
• Corporate/Strategic LPs

By Exit Strategy

• Trade Sale
• IPO / SPAC Merger
• Secondary Buy-out
• Dividend Recapitalization
• Asset Sale / Part-Out