A new report from Bain & Company reveals a significant resurgence in the global private equity (PE) market, with dealmaking and exit values surging to their second-highest levels on record in 2025. However, this rebound is accompanied by a new set of challenges, signaling a critical inflection point for the industry defined by intense competition, longer holding periods, and tougher demands from investors.
A Resurgence Led By Megadeals
The report highlights a 44% year-on-year jump in global buyout deal value to $904 billion and a 47% increase in exit value to $717 billion. This recovery was largely driven by a handful of megadeals, with just 13 transactions of over $10 billion accounting for 30% of the total global value.
While these figures suggest a return to form, the underlying activity was less robust. Excluding the largest deals, the market showed more modest growth, and the total number of buyout deals actually declined by 6%, indicating a market heavily concentrated at the top.
The Liquidity Logjam And Fundraising Squeeze
A persistent challenge facing the PE industry is a “liquidity logjam.” PE firms are currently sitting on a staggering $3.8 trillion worth of 32,000 unsold companies. The average holding period for assets has stretched to nearly seven years, a significant increase from the five-to-six-year average seen between 2010 and 2021.
This delay in selling assets has resulted in disappointingly low cash distributions back to Limited Partners (LPs), or investors. This cash crunch for LPs is the primary driver of a difficult fundraising environment, with capital raised for buyout funds dropping 16% to $395 billion in 2025—the fourth consecutive year of decline.
The New Math Of PE: ’12 Is The New 5′
According to Bain, the industry has shifted away from the “golden decade” of the 2010s, which was buoyed by low interest rates and rising valuation multiples. In today’s high-rate environment, the old formulas for generating returns no longer apply.
The report introduces a new rule of thumb: “12 is the new 5.” Previously, a PE investment could achieve a target return with just 5% annual EBITDA growth. Now, to generate the same benchmark return, firms need to drive sustained, double-digit EBITDA growth of around 10% to 12% annually. This places immense pressure on General Partners (GPs) to implement robust operational improvements and value-creation strategies.
Relevance For The MENA Ecosystem
While Bain’s report focuses on global trends, its findings hold significant implications for the MENA region’s rapidly maturing startup and investment landscape. As global LPs become more selective, MENA-based VCs and PE firms will face heightened competition for capital, forcing them to demonstrate clear, repeatable strategies for generating top-tier returns.
For MENA founders, this shift signals that investors will demand more than just top-line growth. The global focus on strong EBITDA performance and operational efficiency will increasingly influence funding decisions in the region. Startups must prepare for a tougher fundraising climate and be ready to prove their ability to build sustainable, profitable businesses to attract capital from funds that are under pressure to deliver higher growth.
About Bain & Company
Bain & Company is a global consultancy that helps the world’s most ambitious change-makers define the future. Across 65 cities in 40 countries, the firm works alongside its clients as one team with a shared ambition to achieve extraordinary results, outperform the competition, and redefine industries.
Source: Zawya
