PE-backed IPOs raised $18bn in Q3 –Report
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Private equity (PE)-backed companies raised over $18 billion through initial public offerings (IPOs) in the third quarter of 2025, signalling a renewed appetite among public market investors for new issuances from PE portfolios, according to a recent EY report.
“While modest compared with the pre-2021 boom years, these offerings are meaningful in signalling that public market investors are once again open to new issuance from PE portfolios.
Notably, successful debuts have been concentrated in sectors with clear growth narratives and resilient earnings profiles, such as health care and financial infrastructure,” the report noted.
The surge in IPO activity follows a year in which PE firms have also accelerated exit activity, announcing $470 billion in exits so far representing a 40 per cent increase over the same period in 2024. EY highlighted that this increase is largely driven by pressure from limited partners (LPs) for liquidity. “One year ago, roughly three-quarters of general partners (GPs) rated LP pressure between five and seven on a 10-point scale. Today, the majority rate it between 6 and 8, underscoring that expectations around distributions have only grown stronger,” said Pete Witte, EY Global Private Equity Lead Analyst.The third quarter also saw record deal activity, with 156 deals announced totaling $310 billion. Five transactions exceeded $10 billion, the same number as in the first half of the year. The largest leveraged buyout of all time contributed to the all-time quarterly high in deal value, highlighting that sponsors and lenders are increasingly comfortable underwriting large, complex transactions.
Despite the strong exit and deal activity, PE fundraising has slowed, with firms raising approximately $340 billion through the first three quarters of 2025, a roughly 25 per cent decline compared with the previous year. EY attributed the slowdown to a more measured pace of capital deployment by LPs and ongoing caution around distributions.
Improving macroeconomic fundamentals, including rising equity markets, moderating inflation across most G20 economies, and expectations for interest rate cuts in 2026, have supported both PE exits and IPO activity. The report also noted that 61 per cent of GPs now expect exit activity to increase the highest level recorded since EY began tracking sentiment, reflecting growing confidence among sponsors and buyers in public market opportunities.
It added that the renewed activity in PE-backed IPOs and large-scale exits underscores the evolving relationship between private equity and public markets, with implications for liquidity, investor flows, and sector-specific capital market engagement.
