10 Key Insights from McKinsey Global Private Markets Report

As the private markets navigate a new era shaped by shifting economic currents, technological disruption, and evolving investor expectations, the landscape is being redefined by both challenge and opportunity. The McKinsey Global Private Markets Report 2025 reveals an industry in transition, where resilience, innovation, and adaptability are driving differentiation and value creation across asset classes. Against a backdrop of mixed performance and persistent uncertainty, these insights illuminate the forces reshaping private markets and the strategies that will define success in the years ahead.

1. Private Equity is Back in the Game

After two years of decline, PE deal value rebounded by 14% to $2 trillion in 2024, driven by large buyouts (>$500M), which surged 37% in value. Opportunity: Target sectors like tech, industrials, and financial services, where sponsors are deploying capital aggressively.

2. Distributions Outpace Contributions for LPs

For the first time since 2015, PE distributions exceeded capital calls, addressing LP liquidity needs. Action: Highlight DPI (distributions to paid-in capital) as a key metric when structuring exits or secondary sales.

3. Midmarket Funds Are Winning the Fundraising Race

Midmarket funds ($1–5B) were the only category to maintain flat fundraising in 2024, while mega-funds struggled. Advice: Position midmarket GPs as resilient options for LPs seeking targeted exposure.

4. Real Estate’s Bright Spot: Data Centers

Data centers delivered 11.2% returns in 2024, with hyperscalers driving record leasing activity. Opportunity: Prioritize operators with power access and hyperscaler relationships for capital placement.

5. Operational Expertise Trumps Passive Investing in Real Estate

Investors with hands-on operational capabilities now control 37% of real estate AUM (up 11% in a decade). Action: Partner with operators in sectors like multifamily and industrial to unlock NOI growth.

6. Private Debt Proves Its Resilience

Private debt issuance for LBOs rose 30% YoY, with spreads compressing to 550 bps. Insight: Leverage private debt’s low default rates (2.7% vs. 4.7% for syndicated loans) to pitch structured credit solutions.

7. Infrastructure’s Hybrid Future: Energy Meets Digital

Telecom deals (e.g., data centers) now comprise 16% of infrastructure AUM, fueled by AI-driven power demand. Opportunity: Target hybrid assets (e.g., data centers powered by renewables) for long-term capital deployment.

8. The $2.1 Trillion CRE “Maturity Wall” Looms

With $2.1T in commercial real estate loans maturing by 2027, debt funds can capitalize on refinancing gaps and distressed acquisitions. Action: Advise clients on creative financing solutions for office and multifamily assets.

9. Alternative Capital Sources Are Redefining AUM

Nontraditional capital (e.g., insurance, SMAs, evergreen funds) now represents $7–8T in AUM, growing 18–20% annually. Strategy: Expand placement efforts to retail aggregators and insurers seeking yield.

10. Secondaries and GP Stakes Are the New Frontier

The secondaries market hit a record $162B in 2024, while 43% of LPs now invest in GP stakes funds. Insight: Position GP-stake deals and continuation vehicles as liquidity solutions for aging portfolios.

The private markets are entering a period of profound transformation, marked by the convergence of alternative capital sources, operational excellence, and technological innovation. As traditional boundaries blur and new opportunities emerge—from data centers and infrastructure convergence to the rise of secondaries and GP stakes, the most compelling returns will go to those who embrace change and build capabilities for a more complex, dynamic future. With investor conviction remaining strong and the industry poised for further growth, the ability to anticipate trends, adapt quickly, and deliver tailored solutions will be the true test of leadership in the years to come.

Get the full report: McKinsey Global Private Markets Report 2025