Geopolitics, AI And Valuation Gaps Reshape Deal Environment

Key Takeaways

• 49% of survey respondents cite geopolitical conflicts as a broad macroeconomic factor expected to have one of the biggest influences on the deal environment over the coming 12-18 months. At a regional level, however, 65% of EMEA executives see them as one of the main challenges to dealmaking, compared to only 30% of APAC respondents.

• Valuation gaps are expected to persist or widen, prompting greater use of earnouts, seller notes/deferred considerations, flexible structures and more curated/bilateral processes over broad auctions.

• Despite headwinds, GPs forecast mid-to-high-teens net returns for 2025. Hold periods are lengthening (10–15 years acceptable) with more continuation vehicles, while AI and cybersecurity are reshaping both firm operations and deal execution.