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| The Daily Pitch |
| PE, VC and M&A |
| Your edge on global private capital markets |
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| Good morning. In today's Daily Pitch, we look into private capital's growing stash of dry powder and highlight our new research on the fintech sector entering 2026 with momentum. Also: PitchBook and Morningstar have launched their first joint newsletter, Public Meets Private, covering the intersection of alternative investing and the wealth channel. Subscribe now |
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| Our global tracker shows dry powder piling up again |
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By Madeline Shi, Sr. Private Equity Reporter
After recording its first annual decline in more than a decade in 2024, the amount of dry powder held by private market funds returned to expansion early in 2025.
Closed-end private capital funds globally held $4.63 trillion in dry powder at the end of Q1 2025, up $201.5 billion, or 4.6%, from year-end 2024, according to PitchBook data. Just six months prior, these private market reserves had lurched to the first annual drop since 2010.
This increase, at a time when fundraising remains a slow grind, suggests that fund managers have been calling down capital at a slower pace than they may need to. And this may prompt fund managers to write ever-larger checks to compete for deals.
"They need to get the money spent before they run out of the investment period," said Hilary Wiek, PitchBook's principal analyst on fund strategies and performance. "There is a limit on how long they can keep calling capital." |
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Notably, private markets dry powder was heavily concentrated in mid-life funds. In Q2, about 50% of it resided in vehicles between two and five years old. This represents only a slight retreat from the record 54.4% in the prior quarter, which even exceeds levels seen during the 2008 financial crisis and the dot-com bust. The buildup of aging dry powder is likely to put more pressure on fund managers to accelerate deployment before the investment period on these older vintages expires, Wiek said.
Private equity, which saw its dry powder increase by $195.8 billion from the end of 2024, accounted for roughly 97% of overall growth. The reserves dedicated to real assets investments grew about 6% over that period, an increase of around $25 billion. |
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| A message from West Monroe |
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| Life sciences M&A enters its execution era |
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Life sciences M&A is back on offense—and the next wave demands precision. Breakthroughs in biotechnology, metabolic health, and AI are restoring deal momentum while raising the bar. West Monroe’s latest research shows deal volume is climbing, yet execution—not optimism—now drives success. AI factors into 93% of life sciences deals, with 36% of dealmakers calling it core to every investment decision.
Higher velocity brings higher scrutiny. Policy shifts, pricing pressure, and rising digital maturity standards are reshaping how value is created and protected. In this environment, speed alone isn’t enough. Winning teams pair clarity with discipline, moving fast while staying rigorous. Those who do create value sooner—and sustain it longer.
Get the report |
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• Our analysts check in on the state of the fintech industry, including key trends, fundraising data and broader market signals. Read the analyst note
• Just out: Our Q4 valuations data for public companies in the healthcare services sector. See the data
• Cementing its place as one of the largest buyout financings on record, Hologic has wrapped up the broadly syndicated loan portion of a broader financing package supporting its LBO by Blackstone and TPG Capital. Read more |
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| Europe’s AI gold rush risks undermining the broader VC ecosystem |
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By Leah Hodgson, Deputy Editor, European Private Markets
VCs’ enthusiasm for AI is posing a risk to Europe’s broader ecosystem as other verticals are crowded out of dealmaking.
The growing bifurcation between AI and non-AI is also presenting a structural challenge for European VC. Already, investors are forecasting a correction in AI valuations and dealmaking, a shift that could reverberate across the entire ecosystem if capital remains narrowly allocated.
That risk is underscored by the scale of recent investment in AI. Funding for European AI startups reached a peak last year. According to PitchBook’s 2025 Annual European Venture Report, €23.5 billion (about $28 billion) was invested, up by more than 30% from 2024.
As VC euros going to AI increased, so too did the vertical’s share of deal value. Roughly one in every three euros invested in Europe went to AI, a sizable climb from 2024’s 28.1% of overall deal value. A similar increase was observed for deal count, which went from 27.7% in 2024 to 33.7% last year. |
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AI also dominated the top half of the market. Half of Europe’s largest VC deals last year were for AI startups, including French LLM developer Mistral AI‘s €1.7 billion Series C in September and infrastructure developer Nscale‘s $1.1 billion Series B the same month.
This acceleration toward AI pushed overall European deal value up 5.1% to €66.2 billion. Without AI, however, Europe’s VC landscape looks less rosy. The report estimates that the underlying market would have decreased by 5.7% year-over-year, excluding AI.
AI’s dominance of the European venture market is only expected to grow. PitchBook senior analyst Navina Rajan predicts that the vertical will account for more than half of deal value in the region by year-end.
European VC has only recently returned to growth after changing macroeconomic conditions led to a sharp drop in dealmaking. If capital continues to be concentrated in a smaller subset of companies, a correction could exacerbate funding stress and trigger a broader pullback in risk appetite, similar to the period after 2021. |
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Smart reads that caught our eye.
• Michael Saylor took an ordinary software company, Strategy, into the center of the crypto frenzy. Returns were spectacular, for a while. Is it now unraveling? [The New York Times]
• It's 'show me the money' time for AI. If investors start to lose faith, it could dent economic growth and carry political risks as midterm elections approach. [Politico]
• Subsidies and shrimp power Greenland's economy, a social democracy with free healthcare and robust schools. [ | | | | | | | |
