2025 marked a record year for M&A. Despite some macroeconomic hiccups along the way, including tariff-related uncertainty and geopolitical tensions, M&A persisted, reaching new heights and showcasing the strength of both strategic and financial buyers.

While market participants were optimistic going into 2025, the pace at which M&A activity forged ahead was surprising. There were more than 50,000 deals throughout the year, a first-time feat, worth an aggregate $4.9 trillion, or just 125 basis points away from crossing the $5 trillion mark for the first time.

Supporting the record year was its robust second half, which saw more than 27,000 deals totaling $2.8 trillion. After one quarter of flat activity in Q2, global M&A regained momentum, and Q3 and Q4 M&A value set records. 2025 ended on a high note, with Q4 estimated to be the strongest quarter ever in both deal count and value.

Mega-deals—deals of $1 billion or more—were another key driver of deal activity, with a resurgence of its own. While there were only 617 megadeals, accounting for 1.5% of total M&A transactions, those transactions accounted for 56.6% of all M&A value for the year.

The record pace of activity represented the second consecutive year of M&A value and count growth, the first time this has happened for both metrics in over a decade. Though the robust pace seen in 2025 will be tough to surpass.

Heading into 2026, the global M&A market is poised to continue its momentum thanks to ample public and private capital, easing borrowing costs, booming growth opportunities in AI and adjacent tech and infrastructure, and continued market confidence.

While macro challenges such as slowed economic growth and tariff uncertainty linger, M&A activity roaring through the volatility in 2025 is a sign that it takes a lot more to knock the M&A market off its feet. For more data and analysis on the drivers behind the record year for M&A, download our 2025 Annual Global M&A Report.

A year of uncertainty and contradiction has shifted toward optimism for US private markets heading into 2026.

Geopolitical tensions and tariff-induced volatility tested investor confidence throughout 2025, yet PE and VC dealmaking climbed above long-term trends, borrowing costs fell more than 300 basis points from their 2023 highs, and exit activity showed real signs of life. The post-pandemic-deal winter appears to be thawing.

 

But value remains locked in aging portfolios. Buyout and VC fund distributions as a share of NAV lag nearly 10 percentage points below their long-run average. The median holding period for PE-backed companies has stretched to four years, and 35% of PE fund NAV now sits in funds at least seven years old. LPs awaiting capital returns will need continued patience.

Facing these constraints, sponsors have turned to alternative liquidity sources. Dividend recapitalizations have accelerated, and the secondaries market posted a record $226 billion in transaction value. These mechanisms are helping, but they are not substitutes for robust exit markets.

Meanwhile, AI and machine learning are leading the VC deal recovery, accounting for about a third of deal value. Unicorn valuations have surged past $4.3 trillion, with AI and machine learning companies capturing much of that momentum, though deal activity is improving across verticals.

Real estate faces persistent headwinds, with office vacancy exceeding 20% and fund distributions near global-financial-crisis-era lows.

Credit markets have offered relative stability, and falling rates and tighter spreads have eased borrowing conditions, but concerns around loan portfolio health have been rising.

All of this is happening in the backdrop of a structural change across the private market ecosystem. Evergreen funds set a record for new launches in 2025, with credit-focused products leading the charge. We estimate over 500 evergreen funds now operate in the US with nearly $500 billion in AUM, expanding options for private wealth investors navigating an evolving market.

Our latest Quantitative Perspectives: US Market Insights provides a one-stop report to get the key macro developments impacting US private markets, across PE, VC, private debt, real estate, and infrastructure & natural resources.