Private equity investors will have to wait even longer before getting back their money back from older funds as global trade turmoil dims hopes of a deal revival, according to the head of Ares Management Corp.’s buyout business.
President Donald Trump’s global tariffs sparked market swings in recent weeks and scuppered hopes for a rebound in mergers and acquisitions after years of sluggish dealmaking. That’s throttling any optimism that private equity investors will get long-awaited payouts.
“Investors came into this year with a lot of hope that there would be a revival in M&A and distributions from managers would start flowing,” Matt Cwiertnia, head of private equity at Ares, said in an interview. “Many are starting to understand that they might still have quite a wait ahead.”
Investors are getting cash back from existing funds at the slowest pace in over a decade. Buyout firms have turned to creative means of meeting some of those needs in the absence of dealmaking, like borrowing against their portfolio companies or rolling them over from old funds to new ones.
Those tactics have drawn ire from investors who argue they amount to financial engineering likely to dilute returns further down the line. But with potential waiting times increasing, Cwiertnia said investors may now be more accepting and even interested in these strategies.
“They’re looking at their options again and recognizing that creative solutions may be the best path,” he said.
Blackstone Inc. earlier Thursday reported muted exits for key businesses, with first-quarter private equity realizations falling 25%. Globally, private equity funds gathered $508 billion last year, down from $605 billion the year before and the lowest since 2020, according to Pitchbook data. Fundraising is likely to struggle even more if the current deal drought continues.
