Private equity and venture capital investments declined to USD 13.7 billion in Q1 2025, according to a report by IVCA and EY, citing macroeconomic and geopolitical factors.
This represents a 14 per cent decline on-year and 2 per cent decline on-quarter, the report by industry lobby grouping IVCA and consultancy firm EY, said.
“Overall investor sentiment remains cautious on account of several macroeconomic and geopolitical factors, including policies being implemented by the current US administration, decisions on tariff, interest rate changes by central banks, and declining capital market valuations,” EY’s Partner Vivek Soni said.
As private market valuations have yet to correct meaningfully, PE/VC investors are in no rush to close deals and are rightfully monitoring evolving conditions to ensure that macro and micro risks are adequately priced in, he said.
By number of deals, there were 284 transactions in the quarter, which was a decline of 20 per cent on-year and 11 per cent on-quarter, the report said.
Large value transactions accounted for three-fourths of the overall transactions, it said, adding that the three-month period saw a decline in large deals, with 32 deals totalling USD 10.4 billion compared to 34 worth USD 11 billion in Q1, 2024 and 34 valued at USD 10.1 billion in the preceding December quarter.
Pure-play PE/VC investments reached USD 10.9 billion, 62 per cent higher than the value recorded in Q1, 2024’s USD 6.7 billion, and 19 per cent higher than USD 9.1 billion in Q4, 2024.
Exits in Q1, 2025 totalled USD 8 billion, a 57 per cent increase compared to USD 5.1 billion in Q1, 2024 but 4 per cent lower than USD 8.3 billion recorded in Q4, 2024, it said.
Fundraising grew 32 per cent to USD 3.7 billion raised across 29 funds, compared to USD 2.8 billion by 21 funds last year, it said.
