Through one lens, 2024 can be considered the year of the partial exhale. Interest rates and inflation finally came down. Economic growth in many markets remained stable. In response, deal investment and exit value increased. Alas, fund-raising struck a discordant note, but as we know, fund-raising is a lagging indicator for deal activity.

The real culprit behind lackluster fund-raising is a persistent liquidity situation for global limited partners (LPs). While exits grew, distributions as a portion of net asset value sank to the lowest rate in over a decade.

Positive signs? Rates appear poised to remain stable or decrease in many markets. Dry powder is still mountainous and aging. General partners are finding creative ways to boost LP liquidity. More dollars should flow from sovereign wealth funds and private wealth. And most important, returns remain strong. We will see if private equity can avoid black swans in 2025 and get firmly back on the growth track.