Private Equity Groups Hold $1 Trillion as Tariffs Hinder Dealmaking

That’s capital that, in a normal market climate, would have been given back to investors, Reuters reported Wednesday (June 18), citing findings from PricewaterhouseCoopers (PwC).

As Reuters notes, high interest rates in the U.S., the White House’s stop-and-start tariff policy and geopolitical turmoil have eaten away at company valuations, leading to firms holding onto their portfolio businesses much longer than anticipated.

This has helped contribute to a slowdown in dealmaking, the report added. Mergers and acquisitions (M&A), an important measure of global economic health, have stagnated this year.

“Patience is wearing a little bit thin” among limited partners (LP), said Kevin Desai, PwC U.S. deal platform leader.

LP companies combine some of the largest and most influential investors in the world and invest trillions of dollars in PE outfits in anticipation of regular returns.

While the year began with the hopes of a M&A boom thanks to Donald Trump’s return to the White House, deal volume and value have been mostly flat year over year, with 4,535 deals adding up to $567 billion through May, PwC said.

PwC’s May 2025 Pulse Survey showed that 30% of respondents have either put deals on hold or are revising them because of tariff issues, leading investor discontent over delayed returns.

In the first three weeks of April alone — following the first announcement of Trump’s tariffs — preparations for initial public offerings (IPOs) for companies with a combined valuation of over $120 billion were put on hold.

“In a typical M&A cycle, $1 trillion would have already been put back into the market,” Josh Smigel, PwC’s U.S. private equity leader, told reporters while sharing the firm’s 2025 midyear forecast on deal activity.

The news follows a report from the Financial Times earlier this month on efforts by PE firms to prioritize other methods for exiting their investments. These include breaking up businesses to sell them off in pieces or selling companies to themselves via “continuation funds.”

“I can’t remember in my 20 years of growth equity investing, not having an IPO window open for this kind of long period of time,” said General Atlantic Co-President Gabriel Caillaux. “That is obviously calling us to rethink not strategy, but some tactical aspects.”