Q4’25 Pulse of Private Equity

EMA region sees $729.8 billion in PE investment in 2025

PE investment in the EMA region rose from $649.3 billion in 2024 to $729.8 billion in 2025, despite the number of deals falling from 8,922 to 8,278. The strong investment highlights that while PE investors in the region remained very cautious with their capital, they continued to be willing to invest large sums to acquire high quality assets.

UK sees largest share of PE investment in EMA, while Italy and India see deal volume increase

The UK accounted for the largest share of both PE investment and deal volume in the EMA region during 2025, attracting $204.6 billion across 1,862 deals. Germany came a distant second with $84.9 billion across $858 deals, followed by France with $84 billion invested across 1,009 deals.

Notably, deal value rose in the UK, Germany, France, Spain, and India during 2025, while deal volume dropped in all of these jurisdictions except India — which saw deal volume rise from 291 to 310 year-over-year. Italy also saw deal volume increase from 630 to 672 deals year-over-year despite investment falling from $69.6 billion to $58.4 billion.

Buy-and-build strategies driving strong PE interest in add-ons

Within the EMA region, add-ons remained a very healthy part of the PE market in 2025 — contributing a four-year high of $236.5 billion in investment across 4,219 deals; while add-on deal volume fell from the record high of 4,494 deals seen in 2024, it remained solidly in line with levels seen over the past five years. The continued focus on add-ons reflects PE investors continuing to use buy-and-build strategies to drive revenue growth and value creation —with larger, more strategic add-ons taking the priority during 2025.

The financial services space saw a significant number of add-ons during 2025, particularly in the wealth management and insurance broker spaces. The healthcare and professional services spaces also saw strong add-on activity.

Trends to watch for in Q1’26

Looking ahead to 2026, there is considerable optimism for private equity investment in the EMA region. Interest rates have improved and are expected to decline further, while the impact of tariffs has been more muted than initially anticipated across many jurisdictions. At the same time, there is a significant inventory of assets that need to be exited, increasing pressure on PE firms to return capital to investors. An important additional driver of activity continues to be corporate carve-outs, which remain a key focus for PE firms across Europe and are expected to support deal volume into 2026.

At a sector level, healthcare and fintech are expected to remain particularly attractive to PE investors in the EMA region. As governments continue to ease regulations and increase spending on infrastructure and defense, investor interest in these areas is also expected to grow, although this may take time to translate into completed transactions.

There is further optimism that exit activity will improve in 2026, driven by mounting pressure on PE funds to return capital and unlock capital currently tied up in portfolios. The IPO market will be an important area to watch; a handful of successful listings could help reopen the exit window and catalyze broader activity.

In 2026, exit activity is going to improve in the EMA region — it has too. Funds can’t always go with continuation vehicles or dividend recaps and just sit back and wait and wait and wait. It worked for a while, but LPs are done with it. Now that financing is becoming more affordable, buyers can afford to pay slightly higher prices. Intensifying pressure to sell will also see sellers moderating their expectations somewhat. These two factors combined will help close the valuation gap and help drive renewed exit volume. And that’s essential because PE firms need to prove they can return capital.

Tilman Ost

Global Private Equity Advisory Leader

KPMG in Germany