Private Equity Fundraising and Liquidity: Challenges and Opportunities

As we look ahead to 2025, the private equity (PE) industry is poised for significant evolution. Fundraising and liquidity — two critical aspects of the industry — are set to face both opportunities and challenges.

Explore the new and changing opportunities in fundraising and liquidity and discover strategies for PE firms to get ahead.

The private equity fundraising landscape

Growth amid challenges

Despite geopolitical and economic uncertainties, global PE assets under management are projected to reach approximately $5.8 trillion by 2025. This growth is fueled by investors' ongoing search for higher returns and diversification through alternative assets. However, fundraising is not without its hurdles. Many private equity industry professionals view geopolitical issues as a significant challenge to fundraising.

Strategies for success

To thrive in this environment, PE firms must adopt innovative fundraising strategies. This includes leveraging technology to streamline operations and enhance investor relations. Additionally, firms should focus on building strong, transparent relationships with investors to foster trust and confidence.

Private equity liquidity concerns

Market conditions

Liquidity events — such as exits and distributions — are crucial for PE firms to return capital to investors. However, we believe market conditions for liquidity events will be challenging over the next 12 months. This sentiment underscores the need for strategic planning and flexibility.

Navigating liquidity challenges

Firms can mitigate liquidity risks by diversifying their portfolios and exploring alternative exit strategies. Co-investment programs — which are now offered by many global PE firms — provide shared risk and reward. Additionally, using private credit for acquisition financing can offer more flexible financing options.

Embracing technological integration

The role of technology

Technological advancements — particularly in artificial intelligence (AI) — are transforming the PE industry. Firms that effectively integrate AI into their operations can gain significant advantages, from improved deal sourcing to enhanced due diligence. This technological edge is crucial for staying competitive in a rapidly evolving market.

Future outlook

As technology continues to evolve, PE firms must stay ahead of the curve by investing in cutting-edge tools and training their teams to leverage these innovations. This proactive approach will be key to maintaining a competitive edge and achieving long-term success.

The rise of club deals

Collaborative investments

Club deals — where multiple PE firms collaborate on a single investment — are becoming increasingly popular. Many of our clients find these deals very appealing in the current environment. This trend reflects a strategic shift towards collaborative investments to mitigate risks and pool resources.

Benefits of club deals

By participating in club deals, PE firms can access larger deals and diversify their risk. This collaborative approach also fosters stronger relationships within the industry, paving the way for future alliances and opportunities.

How CLA can help private equity with fundraising and liquidity

The PE industry is set for a dynamic future, with both fundraising and liquidity presenting challenges and opportunities. We can work with you to help you adopt innovative strategies, embrace technology, and foster collaboration. CLA can help PE firms navigate these complexities and continue to thrive in 2025 and beyond.