- Private equity
- Papers
- Perspectives
2025 Overview
Paul Newsome
Head of Investment Solutions
Private Equity
Despite geopolitical and macro-economic uncertainties, 2025 has been a largely positive year for investors with public markets posting strong gains.
While investment conditions are far from perfect, inflation globally is moderating, the IMF has slightly upgraded its growth forecasts and many central banks are shifting to a more neutral or easing stance following a significant rate hike cycle that started in 2022.
The global economy has – in the words of the IMF – shown ‘unexpected resilience’ in the face of the US tariffs which caused significant angst earlier in the year. However, the full impact has yet to be felt, particularly given negotiations with significant trading partners such as China are, at the time of writing, yet to be concluded. Stretched valuations in stock markets also imply that a certain level of caution may be warranted.
In private equity, overall deal activity has shown a modest uptick but exits remain few and far between. Meanwhile, fundraising continues to be skewed towards the large and mega-cap funds, with fewer funds raising overall. Good opportunities for creating value and achieving attractive exits remain but, in our view, more in mid-market than among large or mega-cap companies that tend to dominate the headlines.
The mid-market – companies with an enterprise value of between $50m and $1bn – often flies under the radar but consistently provides substantial benefits to investors. Such companies have provided greater potential for operational value creation and tend to be less exposed to global macro shocks. Funds investing in this space often benefit from shorter deployment periods and a greater range of exit options than those focused at the upper end of the scale. Results are also often better, especially from sector-specialist managers, with mid-market buyout funds outperforming large caps while achieving lower loss ratios.
We have seen positive momentum this year across our strategies. One of the real bright spots has been the continued growth in the secondaries market on the back of its greater role as a liquidity provider to an otherwise illiquid market. We have also seen a greater level of consolidation in the private equity market in general. This is resulting in an increase in spin outs, giving rise to a notably driven and hyper-specialised class of emerging managers. Climate impact has seen challenges within the new trend of ‘green-hushing’, where companies are having to keep their ESG efforts below the radar in an increasingly politicised environment in North America. Yet there is increasing evidence, particularly from our own experience, that impact and returns do go hand in hand and provide superb results.
One of the most important metrics for investors, especially in the current environment, is DPI (Distributions to Paid-In). We have consistently achieved a level of exits above that achieved by many of our peers and in 2025 we are on track yet again to distribute close to USD 1bn back to our investors. This is due to the number of outstanding exits we have achieved across our portfolios.
As 2025 comes swiftly to a close, our experts are already looking forward to 2026. In the following outlook Q&A, the team outlines their expectations, hopes and concerns for the year to come.
Market outlook
Francesco Aldorisio
Head of Investments
Private Equity
How do you assess the state of the private equity mid-market and what is your outlook for 2026?
2025 has been a fairly eventful year: after positive initial momentum in Q1, tariff turbulence unsettled the market, leading to a mid-year slowdown in dealmaking and fundraising. The second half of the year, however, brought renewed confidence as inflation tapered and central banks injected increasing liquidity into the system. Hence, in the absence of geopolitical shocks, we expect the positive momentum we are currently witnessing to carry on into 2026, as underwriting conditions continue to stabilise. This will particularly be the case in the lower mid-market, where valuations have remained more realistic and anchored to fundamentals. Financing conditions are improving and leverage remains readily available, supported by the lower debt levels typical of this segment. Consequently, investment activity should continue to grow in 2026.
The exit environment is also set to strengthen. We see sustained interest from trade buyers, a gradual but continued re-opening of the IPO window, and secondary markets gaining both volume and efficiency – increasingly serving as alternative exit channels for a growing number of participants. Fundraising is expected to rebound as cash flow bottlenecks ease and investor overexposure to alternatives normalises. Nonetheless, significant risks persist, as rising global government debt heightens the potential for geopolitical tensions and economic disruption.
How are you navigating this market environment and what are your key investment criteria?
The market environment is indeed improving, but as mentioned, the risk of shocks remains as real as ever. We therefore continue to follow our Unigestion ‘Triple Alpha’ approach to deliver premium returns and successful exits throughout the cycle across all our strategies.
This approach is built on three key elements. First, we invest in companies whose growth is underpinned by long-term secular trends. This allows us to avoid cyclical patterns and mitigate the risk of market downturns during our ownership period, enabling exits regardless of macroeconomic conditions. Second, we remain focused on the mid-market, where valuations and leverage are more reasonable and anchored to fundamentals, enabling value creation to be driven primarily by earnings growth and market consolidation under attractive conditions. Third, we consistently apply our bottom-up, fundamentals-based underwriting process, which has been developed and refined over more than 25 years across market cycles. Combined, these three pillars give us confidence in our ability to navigate changing environments successfully and to continue delivering solid distributions to our investors despite market volatility.
Secondaries outlook
Ralph Büchel
Head of Secondaries
Private Equity
There has been exceptional growth in the secondaries market over the last few years. Will this growth continue?
Conditions for continued growth are strong. We are seeing more sellers (and seller types) engage constructively with the secondaries market, existing secondaries investors continue to be well capitalised, and we are also now seeing new entrants, including specialist buyers, that focus on specific transaction types. Even if historical turnover rates in the secondaries market stay the same – which has historically been ~2-3% of NAV – current levels of unrealised NAV are at record highs and that will be accommodative of higher secondaries volumes.
Those factors are all driving traditional deal flow – such as LP interests – but what constitutes a secondary also continues to evolve and expand; there are now an array of transaction types emerging across every sub-strategy within private equity that are of mutual benefit to buyers, sellers and GPs alike. Whether that be around a broad portfolio or a slice of a single portfolio company, the secondaries market is at the forefront of innovation when it comes to structuring these transactions. All data points indicate another record year in 2025 with volumes potentially doubling from what we have seen since 2023. On the LP stake, side volumes are still very much dominated by larger transactions at the upper end of the market, whereas on the GP-led side the lower end of the market has been a very important value driver. In the first half of the year roughly 1/3 of all transactions have been CVs sub USD 250m in size.
Thinking about the current and future economic environment, what do you see as the key to a successful secondaries strategy, one that can navigate cycles steadily, no matter the weather?
We think there are a few ways to ensure this. Firstly, in this environment, seeing as much deal flow as we can while remaining highly selective and cherry picking only the strongest deals is critical. The influence that our broader platform has, coupled with our systematic approach to origination, means we see almost every deal in our sweet spot. But, we still have a selection rate of less than 3%. Our capital base is right-sized for our opportunity set, meaning we do not have an acute pressure to deploy capital and can focus on high conviction plays.
Secondly, there are certain asset-level characteristics that we believe are critical. Buying high quality, resilient companies at sensible entry valuations is one part but, critically, we are looking for those companies that will always have exit optionality – irrespective of market conditions. As we look around the market today and see which types of portfolio companies are being sold, it’s really just the highest quality companies in the right sectors. We address that on the way in through careful bottom-up asset selection, while always seeking to minimise duration risk.
Ultimately it all comes down the ability to generate more predictable cash flows / distributions throughout a full economic cycle. Combining these two aspects with sensible geographic and sectoral portfolio construction is the most effective way deliver on this promise.
Primaries outlook
Kim Pochon
Head of Primaries
Private Equity
If there is one thing you think potential investors should know about emerging managers this coming year, what would it be?
Emerging managers are no riskier than a traditional private equity investment. Often, investors assume that by investing with emerging managers they will be dealing with a new team with no track record. This would indeed be very risky. But in reality, when we invest with emerging managers, we are typically dealing with highly-specialised private equity professionals with decades of experience in larger, established, firms. Additionally, we often have very clear alignment of interest, which we may not get from an established manager. We often see emerging managers wanting to be the biggest LP in their own fund and their level of GP commitment is much larger than the industry standard of 1% or 2%. This alignment of interest is incredibly important.
How will the trend of consolidation in the market create opportunities for emerging managers?
We have been seeing private equity firms merging and consolidating over the last few years and do not see an end to this in the immediate future. In the short term, this consolidation trend will cause fundraising challenges for emerging managers as we see a continued flight to larger private equity groups.
One of the potential consequences of consolidation in the market is the increased number of spin outs happening in the private equity industry, especially as the larger firms chase ever-larger deals, and experience more complicated governance and team dynamics.
Spin outs, however, can create an opportunity for emerging managers, particularly when it comes to sector specialisation. Inevitably, during the consolidation process, talented investment professionals can become trapped in the middle and look for a way out. We find that spin outs, particularly those with a focus on sector specialisation, is an increasing trend.
Impact outlook
Joana Castro
Head of Climate Impact
Private Equity
Do you see an increase in investor demand for impact strategies in the coming year?
While investor demand for impact strategies has softened in the current macroeconomic and geopolitical environment, we continue to see solid interest, particularly among European investors. Ultimately, the rationale for allocating to climate impact strategies lies in their potential to generate attractive financial returns alongside measurable positive impact. We view the current slowdown as a short-term pause rather than structural shift: as capital already deployed in impact strategies begins to demonstrate solid performance, investors will increasingly recognise these approaches as a valuable and complementary component of a well-diversified portfolio.
How helpful will AI be for impact assessment going forward?
We are still at the early stages of integrating AI into impact assessment. In our part of the market, AI currently proves most useful in streamlining data collection and enhancing data quality and accuracy. However, when it comes to assessing impact itself, we have yet to identify a tool capable of delivering meaningful, reliable insights. Looking ahead, we expect that new AI-driven solutions will emerge over the next few years – tools that can act as a valuable second opinion or as a red-flag system alongside human judgment. Such developments could significantly reduce bias, increase consistency, and make impact assessments more objective and measurable, ultimately helping to strengthen the achievement of desired impact outcomes.
Directs outlook
PJ Frederix
Head of Directs
Private Equity
After two years of muted activity, will 2026 finally bring a rebound in direct deal flow?
We expect the M&A market to continue its recovery in 2026, supported by lower financing costs, stabilising inflation, and pent-up exit demand. However, similar rebounds predicted in recent years have not fully materialised, as ongoing macro volatility — including the tariff disruptions and trade uncertainty of 2025 — has extended timelines and tempered confidence. Buyers have also become more disciplined, with tighter underwriting standards and more rigorous due diligence leading to longer processes and an increased number of failed transactions.
In an environment that remains uncertain, mid-life investments present a particularly compelling risk-reward profile. These transactions arise when GPs seek additional capital to fund add-on acquisitions, pursue new growth initiatives, or execute recapitalisations that provide partial liquidity. By partnering with a GP that already knows the business intimately and has a proven value-creation plan, we can support a step change in growth and achieve an accelerated path to exit. Even if the broader rebound in M&A remains uneven, mid-life transactions should continue to offer a resilient and high-quality source of deal flow.
With continuation vehicles on the rise, is there still room for mid-life investing?
Continuation vehicles and mid-life transactions serve distinct purposes within a GP’s portfolio management strategy. Continuation funds typically suit high-performing assets that require more time to complete their value-creation plans, whereas mid-life transactions focus on companies nearing exit that need incremental capital to accelerate growth. Our participation is often structured through preferred instruments to ensure alignment between new and existing investors, while maintaining focus on a timely exit and providing downside protection.
In the mid-market, continuation vehicles remain far less common, as GPs generally have fewer financing options and smaller investor-relations teams. This creates a strong opportunity for specialist co-investment teams like ours to provide tailored, partnership-oriented capital at critical inflection points. By offering flexible funding that supports both growth and liquidity, we can help mid-market GPs achieve outcomes that traditional co-investment structures often cannot, while enhancing the overall cash-flow profile of our direct investment portfolios.
Important information
INFORMATION ONLY FOR YOU
This document has been prepared for your information only and must not be distributed, published, reproduced or disclosed (in whole or in part) by recipients to any other person without the prior written consent of Unigestion. It is neither directed to, nor intended for distribution or use by, any person or entity who is a citizen or resident of, or domiciled or located in, any locality, state, country or jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
RELIANCE ON UNIGESTION
There is no guarantee that Unigestion will be successful in achieving any investment objectives. An investment strategy contains risks, including the risk of complete loss.
Except where otherwise specifically noted, the information contained herein, including performance data and assets under management, relates to the entire affiliated group of Unigestion entities over time. Such information is intended to provide you with background regarding the services, investment strategies and personnel of the Unigestion entities. No guarantee is made that all or any of the individuals involved in generating the performance on behalf of one or more Unigestion entities will be involved in managing any specific client account on behalf of another Unigestion entity.
NOT A RECOMMENDATION OR OFFER
This is a promotional statement of our investment philosophy and services only in relation to the subject matter of this presentation. It constitutes neither investment advice nor recommendation. This document represents no offer, solicitation or suggestion of suitability to subscribe in either the investment vehicles to which it refers or to any securities or financial instruments described herein. Any such offer to sell or solicitation of an offer to purchase shall be made only by formal offering documents, which include, among others, a confidential offering memorandum, limited partnership agreement (if applicable), investment management agreement (if applicable), operating agreement (if applicable), and related subscription documents (if applicable). Such documentation contains additional information material to any decision to invest. Please contact your professional adviser/consultant before making an investment decision.
Reference to specific securities should not be construed as a recommendation to buy or sell such securities and is included for illustration purposes only.
RISKS
Where possible we aim to disclose the material risks pertinent to this document. The views expressed in this document do not purport to be a complete description of the securities, markets and developments referred to in it. Unigestion maintains the right to delete or modify information without prior notice. The risk management practices and methods described herein are for illustrative purposes only and are subject to modification.
Investors shall conduct their own analysis of the risks (including any legal, regulatory, tax or other consequences) associated with an investment and should seek independent professional advice. Some of the investment strategies or financial instruments described or alluded to herein may be construed as high risk and not readily realisable investments, and may experience substantial & sudden losses including total loss of investment. These are not suitable for all types of investors. Unigestion has the ability in its sole discretion to change the strategies described herein.
PAST PERFORMANCE
Past performance is not a reliable indicator of future results, the value of investments, can fall as well as rise, and there is no guarantee that your initial investment will be returned. Returns may increase or decrease as a result of currency fluctuations.
NO INDEPENDENT VERIFICATION OR REPRESENTATION
No separate verification has been made as to the accuracy or completeness of the information herein. Data and graphical information herein are for information only and may have been derived from third party sources. Unigestion takes reasonable steps to verify, but does not guarantee, the accuracy and completeness of information from third party sources. As a result, no representation or warranty, expressed or implied, is or will be made by Unigestion in this respect and no responsibility or liability is or will be accepted. All information provided here is subject to change without notice. It should only be considered current as of the date of publication without regard to the date on which you may access the information. An investment with Unigestion, like all investments, contains risks, including total loss for the investor.
FORWARD-LOOKING STATEMENTS
This document may contain forward-looking statements, including observations about markets and industry and regulatory trends as of the original date of this document. Forward-looking statements may be identified by, among other things, the use of words such as “expects,” “anticipates,” “believes,” or “estimates,” or the negatives of these terms, and similar expressions. Forward-looking statements reflect Unigestion’s views as of such date with respect to possible future events and are subject to a number of risks and uncertainties, including, but not limited to, the impact of competitive products, market acceptance risks and other risks. Actual results could differ materially from those in the forward-looking statements as a result of factors beyond a strategy’s or Unigestion’s control. You are cautioned not to place undue reliance on such statements. No party has an obligation to update any of the forward-looking statements in this document.
TARGET RETURNS
Targeted returns reflect subjective determinations by Unigestion based on a variety of factors, including, among others, internal modeling, investment strategy, prior performance of similar products (if any), volatility measures, risk tolerance and market conditions. Target returns are based on Unigestion’s analytics including upside, base and downside scenarios and might include, but are not limited to, criteria and assumptions such as macro environment, enterprise value, turnover, EBITDA, debt, financial multiples and cash flows. Targeted returns are not intended to be actual performance and should not be relied upon as an indication of actual or future performance.
USE OF INDICES
Information about any indices shown herein is provided to allow for comparison of the performance of the strategy to that of certain well-known and widely recognized indices. There is no representation that such index is an appropriate benchmark for such comparison. You cannot invest directly in an index and the indices represented do not take into account trading commissions and/or other brokerage or custodial costs. The volatility of the indices may be materially different from that of the strategy. In addition, the strategy’s holdings may differ substantially from the securities that comprise the indices shown.
ASSESSMENTS
Unigestion may, based on its internal analysis, make assessments of a company’s future potential as a market leader or other success. There is no guarantee that this will be realised.
No prospectus has been filed with a Canadian securities regulatory authority to qualify the distribution of units of this fund and no such authority has expressed an opinion about these securities. Accordingly, their units may not be offered or distributed in Canada except to permitted clients who benefit from an exemption from the requirement to deliver a prospectus under securities legislation and where such offer or distribution would be prohibited by law. All investors must obtain and carefully read the applicable offering memorandum which contains additional information needed to evaluate the potential investment and provides important disclosures regarding risks, fees and expenses.
Legal Entities Disseminating This Document
United Kingdom
This material is disseminated in the United Kingdom by Unigestion (UK) Ltd., which is authorized and regulated by the Financial Conduct Authority (“FCA”).
This information is intended only for professional clients and eligible counterparties, as defined in MiFID directive and has therefore not been adapted to retail clients.
United States
In the United States, Unigestion is present and offers its services in the United States as Unigestion (US) Ltd, which is registered as an investment advisor with the U.S. Securities and Exchange Commission (“SEC”) and/or as Unigestion (UK) Ltd., which is registered as an investment advisor with the SEC. All inquiries from investors present in the United States should be directed to clients@unigestion.com. This information is intended only for institutional clients that are qualified purchasers as defined by the SEC and has therefore not been adapted to retail clients.
European Union
This material is disseminated in the European Union by Unigestion Asset Management (France) SA which is authorized and regulated by the French “Autorité des Marchés Financiers” (“AMF”).
This information is intended only for professional clients and eligible counterparties, as defined in the MiFID directive and has therefore not been adapted to retail clients.
Canada
This material is disseminated in Canada by Unigestion Asset Management (Canada) Inc. which is registered as a portfolio manager and/or exempt market dealer in nine provinces across Canada and also as an investment fund manager in Ontario, Quebec and Newfoundland & Labrador. Its principal regulator is the Ontario Securities Commission (“OSC”).
This material may also be distributed by Unigestion SA which has an international advisor exemption in Quebec, Saskatchewan and Ontario. Unigestion SA’s assets are situated outside of Canada and, as such, there may be difficulty enforcing legal rights against it.
Switzerland
This material is disseminated in Switzerland by Unigestion SA which is authorized and regulated by the Swiss Financial Market Supervisory Authority (“FINMA”).
Related insight
- Private equity
- Perspectives
Despite geopolitical and macro-economic uncertainties, 2025 has been a largely positive year for investors with public markets posting strong gains.
While investment conditions are far from perfect, inflation globally is moderating, the IMF has slightly upgraded its growth forecasts and many central banks are shifting to a more neutral or easing stance following a significant rate hike cycle that started in 2022.
[…]- Private equity
- Press releases
Unigestion Private Equity, the global specialist in mid-market leaders, is delighted to announce the final close of Unigestion Secondary VI (USEC VI). The fund was oversubscribed at its hard cap of €1.7bn ($2bn).
[…]- Private equity
- Perspectives
The public markets shrugged off continued macroeconomic and geopolitical concerns to post respectable performance in the third quarter of 2025.
[…]- Private equity
- Corporate
Welcome to the Unigestion Fireside Chat, where we sit down with our experts and explore the latest trends across the private equity industry.
[…]