Capital Markets Outlook 2025: Key Trends

However, we believe that this magnitude of market imbalances is unlikely to fully materialize in practice, with adjustments Everestex review expected on both demand side and supply side, um, with, you know… Frontier markets, what we call frontier markets in general, particularly in local markets, places like Egypt, Nigeria, Kazakhstan, maybe we’d put Argentina in that bucket as well, also been a great source of returns. We have transformative potentially elections in Columbia, Peru, Brazil, in Latin America, Hungary, and Israel, and EMEA, EM are all going to be very closely watched, and be opportunities within markets. Now, that would probably be positive for emerging markets to start a weaker dollar versus EM currencies. Uh, and those are risks that come from the global interest rate environment. There’s been a lot of monetary easing, but the growth environment looks pretty supportive on emerging market inflation.

• Small caps present an opportunity for investors to leverage the strength of the US economy while diversifying away from still highly concentrated parts of the market.
• With valuation running hot and a lot of hype in the market, there is a risk that investors start to question the sustainability of the AI boom.
• Central banks are moving at different speed, and that divergent is going to create opportunity and risk across asset classes.

Global M&a Trends For Private Equity And Principal Investors

Furthermore, global data center construction and European infrastructure spending could require significant amounts of funding from both public and private credit markets. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be and should not be interpreted as recommendations. Growing demand and complexity in private markets calls for a new era of alternatives to overcome long-standing hurdles for investors. More wealth and retirement investors are participating in private markets, taking advantage of new fund structures for accessibility and liquidity, as well as new technologies for portfolio transparency. Episodes of high volatility are leading private credit to take on a larger percentage of overall lending activity, with expanding opportunities in asset-based financing and high-grade corporate credit. Newer client segments, such as wealth investors, are increasing their allocations to private markets largely via evergreen fund structures, such as ELTIFs, LTAFs and model portfolios, which can offer greater liquidity.

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Global Equity Market Outlook

The current economic backdrop—lower interest rates, subdued inflation and modest but positive GDP growth—has set the stage for a rebound in strategic investments and capital raising across debt and equity. The exact weightings (neutral weights) to each asset class will depend on the broad allocation to equity and fixed-income investments that most closely aligns with your comfort with risk and financial goals. The growth prospects of artificial intelligence (AI) continued to boost markets, fueled by strategic investments and partnerships, research breakthroughs and robust earnings. So, if growth, inflation are going to be higher, um, rates globally and in emerging markets may be higher. “In addition, a collapse in U.S. equity prices would have knock-on effects for all risk markets, with credit spreads widening. “Investors in European investment-grade credit markets are suffering from recession fatigue after a string of scares in recent years, making them reluctant to price forward economic risk.

• This year we’re starting to see broader market trends,” she adds, pointing to increased productivity and reshoring of manufacturing to the U.S. as two positive forces poised to drive potential market growth beyond the tech sector.
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• Capital markets activity, for mergers and acquisitions as well as capital expenditures spending, is poised for a resurgence in 2025.
• In September, the Federal Reserve cut interest rates for the first time this year to help support the softening labor market.

Private Equity Statistics 2026: Deal Flow, Exits, And Fundraising Trends

In October 2025, the group announced its first major investment with the $40bn acquisition of one of the world’s biggest data centre operators. External estimates suggest that $5tn to $8tn in capital expenditures will be required by 2030 to fund AI technologies and the enabling infrastructure, including data centres, chips, networks and new energy capacity. Large-scale partnerships to fund AI data centres, the supporting computing capacity, and energy infrastructure continue to expand, reflecting both the scale of investment required and the huge need for future power availability. After several years of uneven dealmaking, confidence is returning as financing conditions stabilise and concerns around interest rates and tariffs begin to ease.

• According to Bloomberg, the overall S&P 500 price-to-earnings multiple (a commonly used valuation metric comparing market price to earnings per share ) expanded to almost 23x forward earnings this year, near a five-year high.
• As private credit has grown in scale and prominence, it has also attracted heightened scrutiny and debate.
• The entire spectrum of public and private asset classes is necessary to capture some of the biggest investment opportunities emerging today, in our view.
• Private wealth and sovereign wealth funds (SWFs) are expected to drive much of the growth in alternatives over the next decade.
• They’re also extending holding periods and preparing assets earlier for sale, but these measures haven’t fully relieved the backlog.

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So I think this, this probably means there’s a bit of a theme of cross-market divergence between U.S. and Euro, which we’ll be keeping an eye on. I think there is a bit of divergence across curves, which we’ll look to investigate, particularly at the front end of the U.S. curve where rates look probably a little bit too low in our view, against our macro backdrop. We have been arguing since March for our consolidation phase, as in our view, there wasn’t likely to be much of a earnings follow through, if at all. Also, Eurozone stimulus has not materialized really so far this year, and we feel that it was actually correct to fade the euros and rally from Q1. It should be broadening into the adoption beneficiaries of AI, so the next 500 companies in S&P 500, and that will also be helping the international names. Within this, as we move through ’26, we do expect more and more companies to be able to point out the benefits of the implementation of AI tools in their operations, which would support their productivity and profit margins.

Five Key Trends Driving Global Markets

Since April, a significant share of investors have renegotiated, withdrawn, or delayed deals. In a March 2025 survey, nearly three-quarters of GPs reported above-average risk tolerance, a counterintuitive finding given the uncertainty. The industry’s unspent capital eased from $1.3 trillion to $1.2 trillion in 2024, but aging dry powder (capital held for four years or more) rose to 24% of the total, up from 20% in 2022. PE accounted for 16% of M&A activity in the Asia-Pacific region in 2024.

Building What’s Next: Greg Lord On Leading Dealroom’s Next Chapter

More specifically, our analysts have a positive stance on Germany given the country’s bias towards cyclical growth sectors and the boost it has received from significant fiscal stimulus. In September 2024, retail Chinese investors were persuaded to put their savings to work as the state instigated a new stimulus package. Maybe for some it felt like the shift came suddenly, but for our equity analysts there was a gradual build-up to the decision to change their call on China. A broader diversification into indirect exposure comes at a cost, as the impact of AI on the shares of the selected companies will be much smaller than for companies directly involved in the technology. Profitability in renewables is improving, supported by consolidation, falling costs, and smarter grid integration, making it a compelling long-term investment.

• Large-scale partnerships to fund AI data centres, the supporting computing capacity, and energy infrastructure continue to expand, reflecting both the scale of investment required and the huge need for future power availability.
• Many issuers considering an offering shifted their plans into 2026, which is expected to meaningfully increase activity—particularly in the first half of the year.
• While banks tend to face tighter capital and regulatory requirements than private credit managers, they continue to play a central role in corporate lending and dealmaking.
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• We are in the early stages of understanding how AI will reshape economies, but there are early signals that it is affecting the labor market.