There are early signs of recovery for private equity after a year marked by liquidity challenges, tariff uncertainty, and a slowdown in exits. Following the April “Liberation Day” tariff shock and a downturn sparked by rising rates since late 2022, projected Q2 performance suggests the market is stabilizing, according to HarbourVest Partners’ latest quarterly private equity benchmark report. 

The $147 billion firm reported projected Q2 2025 returns of 6.1% for global buyout funds, 3.4% for U.S. buyouts, and 7% for U.S. venture capital. While these figures are preliminary and final numbers will only be available once underlying managers report results, HarbourVest views them as a directional indication of relative private equity performance versus other asset classes. 

“Despite a volatile quarter that witnessed a public market frenzy in the aftermath of the tariffs announced on April 2, private equity continued to provide steady performance for investors,” said Scott Voss, managing director and senior market strategist at HarbourVest. 

The firm’s benchmarks, built on analysis of 64,000+ deals representing $3.7 trillion of private capital across 3,000 partnerships, also show vintage-year divergence. Funds launched in 2021 outperformed those of 2022–23, which faced higher entry multiples and valuation pressure as rates climbed. 

Structural trends continue to reshape deal flow. With average hold periods around six years, more investors are using continuation vehicles to manage liquidity, while elevated financing costs have slowed refinancings and new deal activity. Still, conditions have begun to improve: July saw a record month in the syndicated loan market, and private credit lenders remain highly active in sponsor deals. 

Voss added that if rates move lower, buyers will be able to pay more without inflating debt costs, likely accelerating deal velocity. “Conditions are stronger now than earlier in the summer,” he said, noting that renewed competition between banks and private credit is helping revive transaction momentum. 

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