The private equity (PE) market in 2025 is shifting into high gear. Deal activity is picking up, investment strategies are expanding, and liquidity is flowing—injecting fresh optimism into the sector. After a few years of navigating economic headwinds and rising interest rates, firms are unlocking capital and deploying funds at an accelerated pace. At the end of 2024, PE firms announced $565 billion in deals, marking a 25% increase in deal value and a 20% rise in transaction volume compared to the previous year.
But in an industry that thrives on agility, there’s no coasting. With global events like the U.S. elections, geopolitical tensions, and shifting interest rates keeping firms on their toes, adaptability is the name of the game.
Here, we explore the key market drivers, challenges, and the strategies law firms are using to capitalize on emerging opportunities.
Private Equity Market Trends:
Private equity remained a key driver for elite law firms in 2024, even as the broader M&A market faced challenges. Some of the largest PE transactions spanned multiple industries and involved major asset managers and investors. These high-value deals generated significant legal activity, elevating firms to top positions in the M&A league tables.
Among the most significant deals:
- Home Depot – SRS ($18.25B)
- Home Depot's largest acquisition, purchasing SRS Distribution.
- Weil, Gotshal & Manges advised Home Depot; Latham & Watkins represented SRS.
- Novo – Catalent ($16.5B)
- Novo Holdings acquired drug manufacturer Catalent to expand production capacity.
- Goodwin Procter advised Novo; Skadden represented Catalent; Jones Day advised Catalent’s board.
- Blackstone – AirTrunk ($16.1B)
- Blackstone and CPP Investments acquired Australian data center operator AirTrunk.
- Simpson Thacher represented Blackstone; Allens advised CPP Investments.
- Nord Anglia Education ($14.5B)
- EQT, CPP Investments, and Neuberger Berman acquired international schools operator Nord Anglia Education.
- Latham & Watkins, Debevoise & Plimpton, Ropes & Gray, and Cravath Swaine & Moore advised parties in the deal.
- Truist Insurance Business ($15.5B)
- Truist sold a majority stake in its insurance business to a PE-led consortium.
- Davis Polk advised Truist; Simpson Thacher advised Stone Point; Debevoise advised CD&R; Skadden represented Mubadala; Latham advised lenders.
With record fundraising over the past five years, funds must now be deployed. Stabilizing interest rates are unlocking deal-making at a faster pace, ensuring continued momentum throughout the year. This surge in liquidity creates a cycle of reinvestment—fueling growth and competition across the sector.
Private equity has also moved beyond traditional buyouts, with firms investing across a wider range of assets:
- Growth Equity: Scaling high-potential businesses that have already secured venture capital or angel investment.
- Infrastructure Private Equity: Long-term investments in utilities, transport, and energy—offering stability in volatile markets.
- Distressed & Turnaround Private Equity: Revitalizing overleveraged or struggling businesses with restructuring strategies.
This diversification opens up more opportunities, which in turn is driving more work for law firms.
Something that both PE and law firms are watching closely is the interest taxation debate, which has recently resurfaced, with potential policy shifts on the table. On February 6, 2025, President Donald Trump met with Republican leaders to discuss reforms, while Democratic lawmakers introduced legislation proposing higher taxation on carried interest.
- Supporters argue that carried interest taxation disproportionately benefits fund managers.
- Critics warn that raising taxes could deter investment and slow economic growth.
Many firms are already adjusting fund structures to prepare for potential policy shifts, ensuring they remain positioned for success.
Pent-Up Demand Driving Deal Flow
Unlike traditional corporations, private equity clients live and breathe M&A.
With pent-up demand for high-quality assets, firms are aggressively pursuing deals. After a slowdown in 2022–2023, interest rate stabilization is restoring confidence in valuations, leading to:
- More aggressive deal-making as firms move to deploy capital.
- Stronger competition for premium assets, pushing up transaction values.
- Renewed confidence in valuations, leading to faster deal execution.
Private equity professionals must bring a highly strategic approach to each deal, as they work with experienced investors executing complex, high-value transactions. Which makes the need for talent sit predominantly at the mid-senior level where lawyers have the experience to drive these deals.
Law Firm Strategies and Hiring to Leverage PE Growth
Alongside the war for rainmaker partners in the PE space, according to Pirical data, there was a 17% increase in associate-level moves, highlighting the heightened competition among law firms for expertise.
The competition to land lucrative advisory roles in private equity deals has intensified, sparking recruiting wars among top law firms. With high-value transactions dominating the market, firms are aggressively expanding their PE, M&A, and finance teams to secure more deals.
Key law firm strategies include:
- Targeting elite private equity clients to solidify advisory roles.
- Expanding specialist teams in fund formation, transactional law, and regulatory compliance.
- Lateral partner hiring wars, as firms compete for top-tier legal talent in the New York private equity market.
- UK and smaller firms scaling up to capture more of the private equity market share.
A Strong Primary Market: The Key to Sustaining PE Growth
Private equity firms are expanding rapidly, but deal flow and investor expectations are challenging firms to keep pace. A strong primary market—where steady fundraising and a pipeline of new investments sustain liquidity—is critical.
A healthy primary market requires:
- Robust Fundraising: Capital inflows must match investment demand.
- A Pipeline of High-Quality Deals: Ensuring capital is deployed efficiently.
- Balanced Liquidity: Maintaining momentum between fundraising and exits.
Top firms are consistently securing the best opportunities while refining capital allocation strategies to stay ahead of the competition.
Looking Ahead
Private equity is entering a new era—strong liquidity, renewed deal activity, and expanding investment strategies are setting the stage for continued growth.
Yet, success in this environment will require agility, strategic execution, and disciplined capital deployment. Firms that can navigate uncertainty, capture high-value opportunities, and sustain investor confidence will emerge as leaders in the evolving landscape.
Key Takeaways:
- Exits are unlocking liquidity, fueling reinvestment into new opportunities.
- Private equity is expanding beyond traditional buyouts, diversifying investment strategies.
- Deal flow is accelerating, driven by pent-up demand and investor confidence.
- Global events continue to shape strategies, requiring firms to remain adaptable.
- A strong primary market is essential, ensuring sustained liquidity and capital deployment.
- Top law firms are expanding aggressively, fueling demand for PE legal recruitment in New York.
With strong liquidity, increasing deal activity, and a growing appetite for diversification, private equity is poised for sustained expansion. Firms that remain adaptable and forward-thinking will be best positioned to capitalize on these opportunities. The next phase of private equity growth will be defined by strategic capital deployment, market resilience, and the ability to navigate evolving economic landscapes with confidence.
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