Our latest assessment of the private equity space explores trends, concerns and expectations for 2025
The insights and experience of private equity (PE) experts from across Europe were channeled into the latest iteration in Roland Berger’s annual European Private Equity Outlook. Taken together, their findings reflect the market’s expectations surrounding key investment themes of relevance to the private equity industry in 2025.
Technology, software & digital solutions and pharma-
ceuticals & healthcare remain the most attractive sectors
for PE investments.
The Outlook is the 16th consecutive publication in a series launched by Roland Berger in 2010.
Investment backlog and brighter conditions to drive more PE deals
With many exits having been deferred in recent years, the vast majority of respondents (more than 90%) believe that more conducive financing conditions will fuel a noticeable increase in
M&A activity
involving private equity in 2025. This upbeat outlook naturally varies from region to region, however, with the most significant shifts anticipated in the Nordic countries and on the Iberian Peninsula (Spain & Portugal). The outlook for France is notably more subdued, despite expectations of growth here too.
"The outlook is brighter, obviously. But with the world as volatile as it is, you can’t rule out a downturn, so you have to focus on resilient investment targets. It’s a bit of a balancing act."
The study also examines the prospects for
PE involvement
in different sectors, with pharmaceuticals & healthcare and technology, software &
digital solutions
expected to see a busy year. The reasons for this preference are discussed – in sharp contrast to a lackluster outlook for the automotive sector.
An examination of different size classes indicates that small caps and mid-caps will be PE investors’ vehicle of choice in 2025.
PE investment models and transaction drivers
Digging deeper, the study explores how PE investors will tend to operate in the year ahead, identifying co-investment and partnership models as key trends to watch in the European space.
"In times of higher interest rates, investors are constantly looking for additional ways to create value beyond mere capital gains. If interest rates normalize – as we expect – then the focus on value creation will become more diversified."
While many expects clearly anticipate a less tense economic situation overall, it is noteworthy to note that they are still looking to invest in businesses that are perceived to be
resilient.
Evidently, despite the overall improvement, there are underlying concerns about a potential economic downturn in the future. This view is substantiated by experts’ perception that valuation multiples in general are no longer as (excessively) high as was the case a year ago, but that these multiples could continue to increase in resilient sectors such as technology, software & digital solutions and, once again,
pharmaceuticals & healthcare.
An upbeat mood, but still a balancing act
Almost all the PE professionals surveyed expect targets coming onto the market in 2025 to be more attractive than those in 2024. Optimism is particularly high for mid-cap targets, for which they anticipate better debt financing conditions, and they see secondary buyouts as probably the best address for attractive acquisition candidates.
The latter half of the study details what is expected to be the main focus of PE activity, anticipated obstacles to debt financing and the part that value creation initiatives will play in 2025. Three areas – digitalization/data analytics, add-on acquisitions and commercial excellence – are seen to be the key drivers of value creation in the coming year.
The most promising exit channels are discussed, as is the observable decline in deal volumes in some European regions – especially in German-speaking Europe. Also, no analysis would be complete without addressing the role of artificial intelligence (AI), which is expected to deliver significant benefits for PE firms and their portfolio companies. Overall, the study provides invaluable guidance for any private equity players keen to avoid pitfalls while making the most of emerging opportunities in the PE space going forward.
Italian Private Equity Outlook 2025: Insights from the Italian Market
The Italian private equity market is poised for moderate growth in 2025, primarily driven by the mid-cap segment and an increasing focus on business services. Despite the positive outlook, the market still faces challenges, particularly due to the expectations of high multiples by entrepreneurs.
After a year of uncertainty, the sentiment within the private equity landscape in Italy is cautiously optimistic. While the market remains competitive, it demonstrates resilience and adaptability.
In our latest survey, a significant number of respondents anticipate continued growth in M&A activity involving private equity in 2024. This follows a period of adjustment, as the market navigated through various economic pressures in 2024.
The financial conditions are normalizing, which is crucial for fostering a stable investment environment. Although there are still concerns regarding the potential decrease in enterprise value (EV) multiples, the overall expectation for 2025 remains one of moderate growth. Investors are particularly keen on secondary deals, which are becoming more prevalent due to extended holding periods.
Italy's private equity landscape is characterized by a strong mid-market presence, with a rich heritage in manufacturing and consumer goods. However, these sectors have been affected by the current dynamics of the Capex cycle and a general decline in consumer confidence.
As we look ahead, we expect to see a shift among key players in the market. The trend towards club deals and partnerships among private equity firms is likely to increase, allowing for risk-sharing and enhanced collaboration. Additionally, there will be a stronger emphasis on value creation, with many firms leveraging artificial intelligence to drive operational efficiencies and improve investment outcomes.
Overall, while the Italian private equity market faces its share of challenges, the focus on mid-cap opportunities and business services, combined with strategic partnerships and technological advancements, positions it well for a positive trajectory in the coming years.
Nordic Private Equity Outlook 2025: Insights from the Nordic Region
The private equity market in the Nordic region has been experiencing a slow period over the past two years, and while there are signs of a potential uptick in 2025, expectations remain tempered. A significant "hockey stick" effect is not anticipated; rather, gradual improvement is expected as the market stabilizes.
A notable trend is the sustained interest in assets that supports the green transition investment hypothesis. This focus aligns with the global shift towards sustainability and presents opportunities for investors looking to capitalize on this evolving landscape.
Despite ongoing discussions about an imminent market recovery, many industry participants have been waiting for "the next quarter" for quite some time. Concrete improvements will be observed only when they materialize in practice.
The evolution of the market is primarily driven by changes in financing costs, which have reshaped perspectives on valuations. This shift is likely to persist for the foreseeable future. Additionally, a decline in several underlying markets, such as construction, has adversely affected the M&A landscape. Sellers are now opting to wait for 6 to 12 months of positive growth before initiating the sales process, even if advisors were engaged a year prior.
The M&A process itself has also undergone transformation. Traditional auction methods are increasingly being replaced by staggered processes, which alters the dynamics for advisors and participants involved.
A vibrant IPO market could significantly rebalance supply and demand dynamics, offering new opportunities for private equity firms and investors alike.
What distinguishes the private equity market in the Nordics is the financing market, which remains functional despite a lukewarm IPO landscape. The volume of capital raised and the number of transactions per capita in the region are notably high, reflecting a robust investment environment.
The market is predominantly characterized by small- to mid-sized assets, which tend to be less volatile compared to large-cap markets. Although the Nordic region comprises four distinct markets—Sweden, Finland, Norway, and Denmark—there are more similarities than differences among them.
The Nordics boast a wealth of intriguing assets in the technology, innovation, and green transition sectors, attracting interest from impact funds. Furthermore, successful "buy and build" transactions continue to drive market activity, with numerous acquisition opportunities still available. 2025 will be a stronger year, compared to the last two years, from a sponsor perspective.
Register now to access the full publication “European Private Equity Outlook 2025 - The balancing act continues” and dive into the latest trends and projections for European Private Equity in 2025. Furthermore, you get regular news and updates directly in your inbox.
![Change in M&A activity with PE involvement in major countries, 2025 vs. 2024 [%]](/content_assets/content_images/captions/Roland_Berger_24_2599_PE_Outlook_2025_GT01_large_image.png)
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