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| The Research Pitch |
| July 12, 2025 |
| Presented by Deloitte |
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Forecasting VC growth: Our quantitative model predicts 38% growth for North American VC AUM over the next five years. That's a slowdown from 2019-2024 and heavily depends on an exits turnaround. Our new research dives into several other key factors. Read it here.
Inside AI's record-breaking activity: Our new lead AI analyst has published his first report on the industry's historic start to the year—horizontal AI platforms and vertical application startups were notable standouts. Preview the client-only research here.
Climate PE funds: Amid political headwinds, macroeconomic challenges, and growing competition, are climate-focused PE funds here to stay? Our research unpacks whether or not activity is heating up or cooling down. Read it here
Sustainability survey: If you have a few minutes to participate in our ongoing survey on ESG and impact investing, we'd certainly appreciate it. Take it here. |
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| The convergent future of VC |
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Generalization versus specialization is an age-old debate—the latest edition of the Road to Next explores how, in the realm of venture, that dichotomy may be less clear than supposed and also how it may be evolving into a blended approach. The report includes:
- Datasets on how specialist versus generalist participation shifts dealmaking
- Analysis of fund return disparities
- The pros and cons of each approach, especially in the current venture landscape
Read it now |
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| Frozen tail-end funds and when to let it go |
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As private market timelines stretch, a growing cohort of funds are entering their second decade with significant NAV still on the books.
Today, around a third of PE-backed portfolio companies in the US have been held for five years or more, a sign of how extended hold periods are becoming the norm.
That has led to near-GFC lows in distribution yields and stretched NAV curves with an increasing number of tail-end funds unable to liquidate within the rule-of-thumb 10-year life.
For LPs, this trend raises critical questions around deciding what to do with frozen funds extending well beyond term.
Within their control, LPs are generally faced with two choices: sell the fund stake or wait and see.
Increasingly, the sell route is becoming viable. As transaction advisory firms have touted record volumes in 2024, our data suggests a record period for capital raising for secondaries funds at $122 billion for the year ending in Q1.
That has also helped buoy the continuation fund market, and GPs are increasingly leaning into alternative sources of liquidity.
However, while secondary markets offer an outlet, transactions for older funds—especially those with challenged or illiquid assets—rarely clear at par.
So, should LPs hold and wait? Our analysis suggests that holding would historically be a mixed bag.
Looking at performance post year 10, funds with a high amount of remaining value (relative to vintage peers) exhibit materially slower return of capital and a negative median IRR when indexed to the 10-year starting point.
By contrast, funds that are closer to full liquidation at year 10 have historically returned a positive IRR of 8.5% over the remaining life.
For LPs, these outcomes help frame the price of waiting and what investors should look for when deciding whether to let a fund go.
Further, recent research from Upwelling Capital Group amplifies the point. Holding onto tail-end funds has substantial opportunity costs, particularly for funds with early signs of performance problems.
More and more, LPs need to be thinking about taking an active role in managing their aging fund exposures and be willing to take a haircut to unlock capital for better use.
PitchBook clients can access more of our LP-focused commentaries in our dedicated workspace.
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PitchBook Benchmarks
The data is in on the top private capital strategies of Q4 2024, with secondaries, venture capital, and private equity leading the way.
But our preliminary data for Q1 indicates some very different fortunes, with private debt and funds of funds set to leap ahead.
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The newest PitchBook Benchmarks feature IRR quantiles, pooled horizon returns, cash multiples, PMEs, and more, sliced by strategy, vintage year, and geography:
• Global
• Venture capital
• Private equity
• Private debt
• North America
• Europe
• Secondaries
• Funds of funds
• Real estate
• Real assets
Download our free Benchmarks
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European PE Breakdown
European PE dealmaking slowed in Q2 as sponsors hit the brakes amid heightened volatility and tariff-related uncertainty.
In response, activity skewed toward smaller add-on acquisitions, reflecting a cautious-but-tactical deployment of capital. Still, green shoots emerged late in the quarter, with several substantial deals.
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| US investor activity in European PE is on the rise. |
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Exit activity remains subdued, with the IPO window largely shut, pushing GPs to rely on sponsor-to-sponsor transactions as a primary exit route.
Our new report also shows that PE fundraising has held steady:
Read the free report
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European Venture Report
Europe's VC momentum slowed in Q2 after a strong start to 2025.
While total deal value was supported by AI—which made up over a third of all investment in H1—activity declined amid economic uncertainty and diverging central bank policies.
Venture debt stayed resilient, as IPO market headwinds pushed startups toward alternative funding. Aerospace & defense also emerged as a breakout sector.
But H1 fundraising has 2025 on pace for a 53% YoY decline:
Read the free report
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