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Private Equity: 3 Things to Watch for in 2025

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On April 24th, Fogel & Potamianos LLP hosts its annual 2025: M&A and Alternative Investment Forecast. We have learned from experience that while it’s difficult to predict the future, the right people can help forecast it. In our pre-panel meeting with panelists Cesar Bello, Partner with hedge fund Corbin Capital Partners, Jason Somerville, Partner with investment bank GW Hahnbeck, and Robert Dalie, Managing Director of wealth management firm The Summa Group of Oppenheimer & Co. Inc, several insights emerged:

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1. Headwinds still present for exiting investments and fundraising. While PE dealmaking is expected to increase in 2025, the market is more challenging for exits, which means, in turn, that it is more difficult to fundraise. For example, one popular PE strategy is to identify a high-growth market, purchase a company platform in that market, and grow that platform with add-on acquisitions until it becomes a dominant enough player to attract the attention of a large strategic. For example, LPL’s acquisition of Atria Wealth Solutions in 2024 for just north of $1B was preceded by Lee Equity Partners purchase of Atria in 2017 with this strategy in mind. Not all PE has been this successful, however.
   
2. New SEC policies and enforcement priorities will requirement adjustments. With a new SEC regime in place, PE is adjusting to new priorities and guidance. For example, while the private fund adviser rules were formally rolled back, many believe that it codified principles that are still important to the SEC. In addition, the Financial Crimes Enforcement Network adopted final anti-money laundering (AML) rules which begin formally on January 1, 2026.
3. Dealmakers will either take a holding pattern or operate in ambiguity. In an uncertain regulatory environment (e.g. tariffs, antitrust, tax), decision makers can fall into a holding pattern, rather than take action, as they wait for clarity.  For example, a new tax regime that eliminates capital gains treatment of carried interest would force fund sponsors to think outside of the box, including choice of formation jurisdiction, recharacterizing and timing of carried interest, and use of alternative structures (such as trusts and blocker corporations) to reduce tax liability. We expect to have more clarity after the first quarter on some of the aforementioned items, but the reality is that while there is optimism for 2025 versus the last few years, full clarity may never come. There will still be ambiguity to work through.

Jerome Fogel is co-founder of Fogel & Potamianos LLP. A partner in the Corporate Practice Group and Chair of the Sports & Entertainment Group, he is known as an innovator and dealmaker in the legal community. He represents private companies in mergers and acquisitions, emerging venture funds from formation through deployment of capital, and sports superstars in their off-field transactions.

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