Global private equity and venture capital deals showed resilience in 2024 as aggregate deal value increased for the first time since 2021.

Total deal value rose 24.7% year over year to $639.02 billion, according to S&P Global Market Intelligence data, with private equity of at least $5 billion significantly contributing to the growth.

Transaction volume declined on an annual basis, however, falling to 12,672 deals in 2024 compared to 13,547 in 2023.

Among the megadeals driving private equity M&A was Novo Holdings A/S acquiring US pharmaceutical products developer Catalent Inc. for $16.5 billion.

The second-largest deal of the year emerged from the Asia-Pacific region. An investor group including funds managed by Blackstone RE Partners, Blackstone Infrastructure Partners LP, Blackstone Tactical Opportunities Advisors LLC and Canada Pension Plan Investment Board acquired datacenter platform AirTrunk Operating Pty. Ltd. from Macquarie Asset Management Pty. Ltd. and the Public Sector Pension Investment Board for $16.13 billion.

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Global private equity and venture capital deal value accounted for 17% of all M&A transactions, the highest since at least 2019.

Regionally, the US and Canada led global private equity and venture capital M&A transactions, achieving a deal value of $188.72 billion. Europe recorded the most deal volume with 990 transactions last year, surpassing the US and Canada.

The US remains a safe haven due to a pro-business environment, while growth opportunities surround Europe in markets trading at relatively steep discounts, Scott Voss, managing director at HarbourVest, said in an email to Market Intelligence.

Utilities, energy show strength

Private equity-backed M&A transactions in the utilities sector reached $606.4 million in 2024, nearly 2.5x their 2023 levels. Utilities held the top position with the highest deal activity in 2024, followed by real estate.

The energy sector experienced the most significant surge, with private equity deals totaling $346 million in 2024. That represented a sixfold increase year over year, likely due to the increasing power requirements of artificial intelligence. Other industries also gained traction, including healthcare, consumer discretionary and consumer staples.

In terms of private equity and venture capital funding rounds, value increased nearly 9% year over year to $283.71 billion. However, the number of transactions declined to 10,334 from 11,387.

Transaction activity poised to rise

The expectation is that 2025 will see improvement "on all fronts" for private equity deals, according to Voss.

"All relevant measures showed signs of a rebound in the second half of 2024," he said. "This was most obvious in investment activity where we saw dry powder decline for the first time since 2021 and only the second time in the last ten years, as investment activity outpaced fundraising."

Pressure on both sellers and buyers is expected to drive transaction volumes. Extended hold periods and aging assets will compel sellers to exit despite concerns about not achieving optimal value amid bid-ask spread. "The clock is ticking" for committed capital that has not yet been deployed, Voss said.

"I may be overly optimistic, but I anticipate 'liquidity' will be the word of the year in 2025, not due to a shortage but because of the abundance we are witnessing," he added.