Swiss M&A trends in private capital

The rise of private capital (PC) in the global context  continues – and 2025 will see an acceleration of the rebound in global PC M&A activity that began last year. This momentum is being fuelled by falling capital costs and two key industry drivers: a growing pool of deployable funds and a significant backlog of portfolio companies seeking exits. In addition, potential deregulation and tax cuts under the new US administration could further stimulate transactions in the year ahead. Successful dealmakers are keeping a close eye on cross-industry opportunities and value creation. Given these positive global signings, fundraising challenges and the slowdown in the mid-size transaction market in DACH are expected to ease in the second half of 2025. Read on for our latest insights into M&A trends and private capital developments.

As private capital navigates 2025, there is a renewed focus on value creation. With valuations still high and interest rate declines slowing, funds are prioritising operational transformation to justify premium pricing. At the same time, large companies are streamlining their portfolios, creating opportunities for strategic divestments and acquisitions. 

Alongside this emphasis on value creation, another key trend shaping M&A is the increasing convergence of industries. Private capital players are investing in cross-sector opportunities, such as the intersection of infrastructure, energy, and technology – driven by the AI transformation – or the integration of consumer health and fintech. Meanwhile, consolidation within private capital itself is gaining traction as the largest funds expand across asset classes, putting pressure on mid-sized players to carve out distinct niches. 

While geopolitical uncertainties and policy shifts may cause some volatility, the overall trajectory for private capital remains positive. Deal activity is likely to vary by region, but the market recovery is well underway, driven by a strengthening M&A environment. This rebound has been underway since mid-2024, marking the end of a two-year stagnation. Though not entirely smooth, deal values have increased, supported by a more favourable equity issuance environment. IPO activity is normalising, with a strong pipeline of unicorns and private equity exits expected in the coming year. 

A key driver of this momentum is the record level of dry powder, which surpassed $1.6tr globally in 2024, with approximately $1tr of that alone in the US, according to Preqin. The amount of global PE investable funds in December 2024 was 43% higher than at the end of 2019, before the pandemic. Private capital firms are increasingly tapping into new funding sources, including private retail investors and insurers, to deploy capital effectively. Meanwhile, pressure from limited partners (LPs) for returns is accelerating exit activity, with 29,400 private equity portfolio companies by the end of 2024 – 46% of which have been held since 2020. 

To cope with softer market conditions, the rise of continuation funds has provided an alternative liquidity route, allowing firms to return capital to LPs while retaining ownership of assets. With a backlog of exits and strong capital reserves, sector convergence, disciplined value creation, and strategic exits will be the defining themes of private capital M&A in 2025.  

As private capital expands its influence in the global financial industry, several key trends are emerging – driven by strategic portfolio optimisation, cross-industry investments, and evolving market dynamics – that will shape the future of the sector.

Carve-outs and sector convergence drive M&A momentum

Corporate carve-outs and the convergence of technology, energy, and infrastructure are driving the latest wave of private capital M&A. As companies refine their portfolios, divestments are increasing globally and within Switzerland. Notable examples include DSM-Firmenich’s carve-out of its animal health and nutrition division – a leading global provider of animal commodity and specialty feed additives – and Nestlé’s planned divestment of its water business. Similarly, Unilever is looking to sell its ice cream business and an additional $1bn in food assets, while Comcast plans to spin off NBCUniversal’s cable networks and digital assets – creating attractive acquisition opportunities for private equity. 

Technology-related deals remain strong, particularly in software and emerging sectors such as climate and healthcare tech. Recent transactions include Thoma Bravo’s $1.5bn acquisition of Everbridge, a critical-event management software company, and GIC and Silver Lake’s $1.7bn purchase of Zuora in October 2024. 

Meanwhile, cross-sector transactions – especially those tied to the AI boom – are accelerating. Data centres and energy infrastructure are seeing major investments, such as BlackRock and Microsoft’s partnership with Global Infrastructure Partners and a Middle Eastern AI investor, aiming to invest up to $100bn in data centres and supporting power infrastructure, with an initial $30bn PE capital raise. Additionally, OpenAI, SoftBank, and Oracle have announced ‘Stargate’, a $500bn joint venture to develop a US-wide data centre network. 

Geographically, Japan is emerging as a key PE market, driven by a weaker yen, a shrinking domestic market, and rising shareholder activism. Private equity deal value in Japan surged to $50bn in 2023, representing 5% of global PE deals, before moderating to 3% in 2024. India, too, presents long-term potential, with digital adoption, a strong start-up ecosystem, and favourable policies fuelling deal activity – though, like in Japan, PE deal values have declined since the 2022 peak. 

Maximising value through active portfolio management

Private capital firms are restructuring internally to sharpen their focus on value creation. Leading players are establishing dedicated operational teams to improve the performance of portfolio companies, whether by reducing costs or driving revenue growth. These operational improvements are designed to increase efficiency, productivity, and long-term liquidity. 

This shift towards more proactive management reflects growing investor pressure for higher returns, especially as companies hold assets for longer than before. Asset classes such as energy and infrastructure, which are currently in favour, naturally come with extended investment cycles.

Industry consolidation accelerates with private credit and sovereign capital

Rising interest rates and tighter financing conditions have accelerated consolidation in the private capital industry, with large firms dominating fundraising. In the first half of 2024, more than half of global private equity capital raised came from just 12 mega-funds of more than $5bn each, including Vista Equity Partners’ $20bn-plus fund and Silver Lake’s $20.5bn fund. Smaller and mid-sized players are now under pressure to specialise in niche markets to remain competitive. 

Private credit has become a key driver of consolidation, now managing $1.7tn globally – more than triple the amount in 2015. It has emerged as a strong alternative to traditional bank financing, fuelling major acquisitions such as TPG’s $2.7bn purchase of Angelo Gordon and Brookfield’s $1.5bn investment in Castlelake. BlackRock is also expanding, with its proposed $12bn acquisition of HPS Investment Partners in December 2024. 

At the same time, sovereign wealth funds are moving beyond their traditional role as LPs by investing directly in private equity and private credit. Examples include Mubadala’s $4.2bn investment in an Australian fertiliser company alongside Global Infrastructure Partners, and Saudi Arabia’s PIF’s strategic partnership with Lenovo to expand its global footprint. In private credit, Korea Investment Corporation is strengthening its direct lending presence in Asia, while the Abu Dhabi Investment Authority (ADIA) has committed $1bn to AGL Credit Management’s private credit fund. 

With these sovereign funds managing over $300bn each, and PIF alone targeting $2tn by 2030, their ability to take a longer-term investment approach gives them a competitive edge over traditional private capital firms. As consolidation continues, private credit and sovereign capital are reshaping the industry landscape.

Continuation funds have emerged as a key solution for private equity firms seeking to extend the holding period of portfolio companies when traditional exits are delayed or valuations fall short of expectations. These funds allow general partners (GPs) to retain assets while providing limited partners an exit option without selling to a competitor. 

Initially gaining traction in the aftermath of the 2008 financial crisis, continuation funds have surged in popularity amid recent high-interest-rate conditions and a backlog of companies seeking exits. By mid-2024, they accounted for more than $50bn in assets under management, nearly double the amount in 2022 and 20 times the amount in 2019.

Now a well-established feature of the secondary market, continuation funds provide an alternative to LP-led and GP-led transactions, often at a discount. They help avoid forced sales at lower valuations, provide liquidity for existing investors, and access to proven assets for new investors. However, their structure requires careful scrutiny of valuations, potential conflicts of interest, and regulatory oversight. Their growing use underlines the adaptability of the market to meet exit challenges.

The Swiss private equity (PE) market has grown steadily in recent years, with investments across a wide range of industries and company sizes. The diversity of the market 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. However, current global issues are particularly relevant in a smaller market such as Switzerland, contributing to uncertainty in the short-term outlook. Nevertheless, there is optimism for 2025, with several potential exits on the horizon.