Any day now, the metronome of the economy will restart and the economists, surveyors and statisticians in the federal government can resume their work generating the steady beat of economic data that is the foundation of financial markets.

Without that rhythm of new information here on the Quantitative Research desk, we've been searching for a throughline amid a clattering of mixed signals. Consumer sentiment is low, but job numbers are stable—gold prices are screaming, but businesses seem to be managing tariff-era inventories with ease.

This week, we released our latest Quantitative Perspectives report, a deep dive into the state of US PE. We have over 40 pages of charts, data and analysis to tell the story of what is happening in deals, fundraising, distributions and more.

In this report, I've been focused on the divergence in reported buyout deal metrics and our deal valuation model. The model is not terribly complex, regressing a handful of macroeconomic variables against historical deal activity. Since the back half of 2023, there has been a sustained divergence in actual deals and our estimations.

 

Detrended quarterly PE buyout deal value versus macro model-implied deal value (Z-score)

For the last two years, the model has implied a level of deal activity that didn't materialize, and in the most recent quarter, the pendulum swung back hard. Intuiting a "why" from this swing pulls at a few different threads. In 2024, the model initially began to rise due to moderating inflation. Not lower inflation, per se, but smoothing the swings.

So, is the model just implying that we're seeing the long tail of a successful hiking cycle and that the recent spike in deals is just pent-up demand? Potentially. The deal environment has been strong in 2025, finally recovering from inflation-era malaise.

Moving forward, a step in the capital cycle, one would intuit that an improvement in deal and exit activity would kickstart a new cycle of fundraising. Our distribution-driven fundraising model mirrors that assumption. Given the recent level of distributions, we expect to see buyout fundraising increase over the next 12 months as that capital gets recycled.

Our models present a summary of their inputs, and many inputs are averages of something else. The layers of smoothing baked into these indicators fail to describe how institutional investors are scrambling for liquidity, that third quarter buyout numbers are heavily weighted by a handful of blockbuster deals, and that a hot public equity market is driven by fewer than a dozen names.

So as the White House is preparing investors to not expect to see a backdated JOLTS report or October CPI print, it might be best to scratch a few layers deeper than any top-line number. A good place to start is our Q4 2025 Quantitative Perspectives: Balancing Act.

After a sluggish Q2, VC investment in carbon and emissions technologies grew to $3.5 billion in Q3 2025—a 40% increase QoQ. But the rebound masks a longer-term trend in which deal count fell to just 187, the lowest since 2020, signaling a market increasingly dominated by large deals rather than broad VC investments.

Much of the quarter's $3.5 billion came from 10 deals over $100 million, including Fermi’s $350 million Series C and Divergent's $290 million Series E. Investors are concentrating capital in fewer, more mature companies, with late-stage deals now representing two in five transactions.