Forvis Mazars, LLP, ranked among the largest public accounting and consulting firms in the United States, has officially published the results from its Global Private Equity Report 2025, which features insights from more than 300 respondents across five continents.
As for results, they show that, over the past year, North American private equity (PE) firms have demonstrated the highest rate of portfolio performance against expectations, thus showcasing their ability to navigate economic volatility and capitalize on growth opportunities.
“North American private equity firms continue to demonstrate their resilience and adaptability,” said Scott Linch, partner and private equity national industry leader at Forvis Mazars US. “Their commitment to strong fundamentals and resilient growth strategies leaves them well-positioned to deliver strong returns despite broader market challenges.”
Talk about these results on a slightly deeper level, we begin from the display of superior portfolio performance. You see, more than 33% of firms surveyed cited performance at three years “above planned,” This treads up a long distance to show that North American PE firms outperformed all regions except Central and Eastern Europe (CEE). They markedly did so in regards to internal rate of return (IRR) and alignment with performance expectations.
Next up, we must get into the sector preferences. In essence, financial services and technology, as well as telecommunications remain top investment targets, attracting 51% and 47% of investors, respectively. If we look deeper into these seconds, a larger chunk of firms were found to prioritize businesses with scalable, recurring revenue models, and minimal reliance on physical assets.
“In addition to overall confidence in performance, the global report found that the United States is also seen as the biggest target market for investment, with the United Kingdom following closely behind,” said Linch.
Moving on to the prospect of investment strategies, the report would reveal that add-ons dominated the U.S. market to signal a wider preference for platform consolidation and de-risked transactions. Another detail worth a mention here is rooted in the fact that average investment ticket sizes remained under $50 million. This complemented the industry’s focus on more manageable and flexible investments.
Now, if we study operational value creation, it saw North American firms leading the way in deploying formalized value creation teams, with some even expanding their operations teams by almost 30% in the past year to drive portfolio growth.
Hold on, we still have a few bits left to unpack, considering we still haven’t touched upon the overall fundraising confidence. North American respondents are confident in the market conditions for fundraising efforts, and we get to say so because 71% said they have a very positive or fairly positive outlook for 2025. Beyond this contingent, Latin America was the second closest region, relaying confidence level at 47%.
We also haven’t touched upon how an estimated 60% of all survey respondents said that market evolution was the top roadblock negatively impacting portfolio performance. This was followed by geopolitical uncertainty at 45%, and misalignment with management at 37%.
To round things up, we must acknowledge that North American firms were largely deemed as optimistic for 2025, as confidence in deal activity and portfolio performance remains high.
“Extending portfolio holding periods to maximize value creation amid delayed exits and leveraging digital transformation and ESG integration to enhance long-term growth have been the two biggest strategies to mitigate market evolution challenges,” said Linch. “Global market volatility, driven by interest rates and inflation, will remain the biggest challenge, affecting both short-term gains and long-term investment strategies into 2025.”