New York, US – Private equity firms in the United States are set for a second consecutive year of recovery in exit activity, as buyout firms increasingly cash out their investments, according to a new report by PitchBook. While the sector shows signs of a rebound, analysts warn that additional transaction activity is needed to address the growing backlog of older assets on PE firms’ books.

Strong Exit Activity in 2025

Through October 2025, US buyout firms completed approximately 1,300 exits, including sales, initial public offerings, and transfers to new funds, raising an estimated $621.7 billion. This represents a significant increase in value compared to 2024, when 1,369 exits raised $379.6 billion.

Deal activity accelerated in the third quarter of 2025, reaching levels not seen since late 2021 and early 2022. PitchBook analyst Kyle Walters noted that “half of respondents to our survey said their primary focus was exiting portfolio companies, while 8% plan to delay until market conditions clarify.”

Growing Hold Periods

The report found that the median hold period for private equity assets continues to lengthen, standing at 3.9 years in 2025, compared with 3 years in 2022. Approximately 30% of PE-backed assets are seven years or older, highlighting the need for robust exit strategies to unlock capital for new investments.

Fundraising Trends and Market Challenges

Total private equity fundraising is expected to decline in 2025, but larger firms dominate the market. As of the end of October, 46% of capital was raised by the 10 largest firms, up from 35% in 2024. This concentration underscores the challenges smaller firms face in achieving profitable exits, which are crucial for returning capital to investors and enabling new deals.

Walters explained the “private equity flywheel” is recovering but at a slower pace than anticipated, noting that reduced fundraising limits new dealmaking, including acquisitions from other private equity firms. First-time funds face the steepest hurdles, with 2025 projected to set a new record low for first-time funds raised, falling below 2024’s level.

Market Outlook

Despite challenges, the recovery in exit activity signals renewed confidence among private equity managers, particularly at larger firms with established portfolios. Analysts suggest that continued deal flow and capital recycling will be crucial to maintaining momentum and supporting long-term growth in the US private equity market.