Private Equity Sales Fall 36% to $103B in Q1 as Exits Tighten
Private equity deal volume sank 36% year-over-year to $103B in Q1 as AI selloff and war in Iran constricted the exit market. US PE-owned companies borrowed $94B in 2025 to fund dividend payouts while sponsors increasingly use minority stake sales and continuation vehicles.
1. Q1 Private Equity Deal Decline
First-quarter private equity sales fell to $103 billion, down 36% from a year earlier, as AI-related tech selloffs and conflict in Iran limited buyer interest and widened valuation gaps for portfolio exits.
2. Dividend-Funded Payout Risks
Private equity–owned firms in the US borrowed $94 billion last year to fund dividend distributions, increasing leverage levels and exposing portfolio companies to higher refinancing risk under rising interest rates.
3. Sponsors Seek Exit Alternatives
With traditional sponsor-to-sponsor deals stalled, firms are increasingly pursuing minority stake sales and continuation vehicles to provide liquidity for investors and manage hard-to-sell assets.