Fundraising for private equity is declining for the second year in a row. Inflows for traditional buyout funds, which have been the nucleus of the private markets sector, are currently at their lowest level since 2018. This is according to a first quarter report by the analysis company Pitchbook.

Accordingly, private equity fundraising activities also appear to be on a downward trajectory in the longer term. „With 131 funds raising 115.5 billion dollars globally, fundraising in the first quarter of 2025 is below the 178.8 billion dollars raised in the first quarter of 2024 and is expected to fall below 2024 levels on an annualised basis,“ states Hilary Wiek, Senior Strategist at Pitchbook. The decline is 35%. "This is remarkable considering that 2024 was already a weaker fundraising period than previous years.

Things are not looking any better for the venture capital sector either. In the first quarter of 2025, a total of only 18.7 billion dollars in venture capital was raised for 231 funds. „In the midst of the ongoing market turbulence, this represents a sluggish start to the year,“ comments Wiek. „If this pace continues, both the total capital raised and the number of newly raised funds in 2025 will fall to their lowest levels in more than a decade.“

With 19 billion dollars raised by 42 non-listed closed-end property funds in the first quarter of 2025, the asset class had a better start to the year than in 2024, but was by no means on track for a record-breaking annual fundraising result. In contrast, fundraising for real assets such as energy assets or infrastructure assets got off to a very lively start in the first quarter of 2025: according to Pitchbook, 18 vehicles received commitments totalling 52.4 billion dollars.

„If the asset class maintains this pace, the capital raised for 2025 would mark a new high,“ calculates Pitchbook strategist Wiek. „However, given lower liquidity, the denominator effect and other macroeconomic factors, this outcome is unlikely.“ The „denominator effect“ refers to the fact that institutional investors put less money into real asset investments as soon as their share of the overall portfolio has reached the statutory or self-imposed upper limits.

In terms of fundraising for private markets as a whole, however, the first quarter of 2025 started in good shape, and the volume of new capital commitments reached just over a quarter of the total fundraising in 2024. In particular, the proportion of secondaries – investments in shares in existing funds – doubled to 15%. Institutional investors are clearly sensing great opportunities here.

According to Pitchbook, in the period after the US elections – and before Trump's tariff chaos – optimism for a deregulatory policy change had initially grown. This would have enabled private equity firms to sell their stakes in companies at a profit and repay their institutional investors. Some private equity firms have apparently waited to finalise fundraising for individual funds in the hope that they will still receive capital commitments from some institutional investors that will rebalance their overall allocation for the current year. „We have also seen this in previous years,“ explains Wiek.