The fundraising landscape in 2025 has remained challenging for funds. Current data shows a clear decline in private capital raised; SS&C Intralinks reported that by the end of 2024 the number of closed private-capital funds was down roughly 45% year-on-year, with total capital raised falling by about 18%. EY estimates that private equity firms raised around $340 billion in the first three quarters of 2025, putting the industry on track for roughly a 25% decline from 2024. While deployment activity may be improving, the amount of new capital being raised is lower than in previous years.

In Europe, the same pattern is visible. According to a joint report from Invest Europe and Arthur D. Little, European private-equity funds raised about €54 billion in the first half of 2025, broadly flat versus the preceding six months but around 20% below the equivalent period in 2024. Venture capital has been hit harder; PitchBook data suggest only €6.9 billion was raised across 87 European VC funds so far in 2025, and a Seedblink article suggests that VC fundraising in the first half of the year reached just €5.2 billion, its weakest level since 2015.

As fundraising conditions for private equity funds remain tight, the implications for our clients in the mid-market are increasingly shaped by LP expectations.

Many funds have been holding assets for longer than intended, often waiting for valuations to recover. However, in order to raise new capital, managers now need to demonstrate a clear ability to exit assets in existing portfolios. This pressure is expected to drive an increase in transaction volume as funds bring more companies to market to create liquidity, evidence realised performance, and position themselves credibly for upcoming fundraises. For businesses looking to grow through acquisition, this creates a more active environment with a broader range of assets coming to market than in the past two years.

Those strategic buyers that have delayed acquisitions due to price uncertainty or higher financing costs may find a more attractive pipeline of targets as sponsors look to accelerate realisations.

For companies looking to raise capital in 2026, planning is critical. Businesses with strong fundamentals, clear cash-flow visibility, and a well-defined plan for how investment will translate into measurable value will still attract competitive interest. Capital raising will however remain challenging, with more demanding due-diligence expectations; however, the PE market is flush with cash which needs to find a home. It is important that companies engage early, ensure their growth narrative is well-defined, and position themselves clearly against the themes investors are prioritising.

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