Swiss M&A trends in private capital

Private equity and principal investors continue to show strong interest in dealmaking. While high-quality businesses with robust fundamentals and favourable sector dynamics remain attractive, investors are becoming more selective and, in some cases, are waiting for greater clarity on the market environment.

Several of the largest PE firms are using the uncertain US landscape as an opportunity to expand their international presence, particularly in Europe. At the same time, they are focusing on strengthening their internal operations and those of their portfolio companies to better manage macroeconomic and geopolitical risks. This includes addressing supply chain vulnerabilities and preparing for the potential impact of new trade barriers such as tariffs. Sovereign wealth funds, too, have become more active in Europe and other markets.

Large PE funds are also beginning to adopt AI to enhance operational efficiency – developing AI roadmaps for portfolio companies and integrating advanced tools into core processes. As the technology evolves and trust in its outputs increases, AI is expected to become an integral part of the M&A process. This trend is global: sovereign wealth funds from the Middle East, Asia, and elsewhere are allocating significant capital to support AI-related infrastructure, particularly energy-intensive projects, often in collaboration with PE firms. We expect this momentum to continue.

Private equity activity showed renewed strength in early 2025. Both buyout volumes and values increased in the first quarter compared to the same period in 2024: estimated deal volumes rose to 4,828 (up from 4,462), while deal values climbed to $495bn (up from $354bn). Early indicators suggest this upward trend continued into the second quarter, although with slightly less momentum. One standout transaction was GTCR’s announced $24.25bn sale of payment processor Worldpay to Global Payments – one of the largest M&A deals of the year – despite GTCR having owned the company for less than two years.

Exit conditions remain challenging, but activity has picked up. According to PitchBook data, the number of PE exits rose to 903 in the first quarter of 2025, up from 820 a year earlier. Exit values nearly doubled, reaching $302bn compared to $166bn in the first quarter of 2024. This increase is partly fuelled by the growing use of secondary transactions and continuation funds, which offer liquidity to some investors while allowing others to remain invested in portfolio companies.

Despite these gains, the backlog of unsold assets continues to grow, and fundraising remains difficult – capital continues to concentrate among the most successful general partners. Still, if policy headwinds begin to clear, we expect exit activity to accelerate and support a further recovery in dealmaking.

The US market remains cautious, with uncertainty around trade policy, higher-than-expected interest rates, and ongoing regulatory pressure weighing on M&A. Hopes for broad deregulation have faded, and the FTC continues to review major deals – such as Arthur J. Gallagher’s $13.45bn acquisition of AssuredPartners, which drew additional scrutiny in March 2025.

Outside the US, activity among private equity firms and principal investors – including family offices and sovereign wealth funds investing their own capital directly – has been notably stronger across several markets, as investors seek out regions with more favourable conditions and compelling value opportunities. In Japan, low interest rates and growing shareholder activism are prompting large corporates to divest non-core assets, creating attractive opportunities. Europe is also drawing strong interest, with relatively lower valuations and increased public investment in infrastructure and defence. Blackstone, for instance, plans to invest at least $500bn in Europe over the next decade, targeting lending and large-scale infrastructure deals.

Private credit is another major focus. Leading PE firms have expanded their capabilities through strategic deals, including TPG’s acquisition of Angelo Gordon (Nov 2023), Brookfield’s investment in Castlelake (Sept 2024), and BlackRock’s proposed takeover of HPS Investment Partners (Dec 2024). Once a bank lending alternative, private credit is now widely used as a structured financing tool (see spotlight below).

As private equity adapts to a changing market environment, three major themes are shaping how leading investors deploy capital and create value across portfolios: AI integration, cross-sector convergence, and access to retail capital.

Once a niche segment, private credit has become a core pillar of the global financial system – evolving rapidly in scale, complexity, and strategic importance for both investors and borrowers. The developments shaping this transformation can be seen across five key dimensions:

A market on the rise

Private credit has grown rapidly over the past 15 years, reaching nearly $2tr in global assets under management. Competing directly with traditional bank lending, it continues to attract strong investor demand – PitchBook data shows that in 2024, the five largest funds each raised over $10bn, totalling $77bn.

Broadening in scope and structure

Originally focused on direct lending by non-bank institutions, private credit has expanded across the entire debt value chain – from origination to structuring and distribution. Many deals now resemble structured finance transactions. Notable examples include Carlyle’s $1.3bn investment in Trucordia in June 2025, aimed at deleveraging and simplifying governance, and KKR’s $600m structured capital injection into India’s Manipal Group to support expansion. This followed Temasek’s $2bn acquisition of a 41% stake in Manipal Health in late 2024.

Flexibility for lenders – and borrowers

Private credit funds, operating under lighter regulatory frameworks than banks, can accept a wider range of collateral and target higher-yield, higher-risk segments. Some use payment-in-kind or equity-linked instruments to enhance returns and flexibility. Borrowers benefit from faster access to non-dilutive, tailored capital, often in innovative forms – such as convertible preferred structures that combine fixed returns with equity upside.

New fund models take shape

As the market evolves, hybrid strategies are emerging. Warburg Pincus closed a $4bn fund in September 2024 for structured investments combining debt, preferred equity and asset-based finance. Carlyle followed with its $7.1bn Credit Opportunities Fund III in December 2024, highlighting growing appetite for flexible, multi-layered credit solutions.

Regulatory scrutiny increases

With rapid growth comes growing oversight. Institutions such as the IMF have voiced concerns about the resilience of private credit funds, many of which have yet to weather a full credit cycle. As institutional and retail participation rises, regulators are calling for increased transparency and safeguards to protect investors and monitor systemic risk.

The Swiss private equity (PE) market has grown steadily in recent years, with investments spanning a wide range of industries and company sizes. This diversity is supported by the flexibility of Swiss law, which allows PE sponsors to acquire both majority and minority stakes, the latter often protected by special shareholder agreements. At the same time, global uncertainties weigh particularly heavily on a smaller market such as Switzerland, creating a cautious short-term outlook. While there is a general willingness to transact, the prevailing climate makes it more difficult to bring deals across the line.