Private Equity Holds $1 Trillion Unsold Assets Amid Tariffs, M&A Slows

Private equity firms are currently holding about $1 trillion in unsold assets, a significant accumulation of capital that would typically have been returned to investors, according to PricewaterhouseCoopers (PwC). This prolonged holding period is driven by high interest rates, President Donald Trump’s inconsistent tariff policies, and geopolitical uncertainties, all of which have depressed company valuations and slowed mergers and acquisitions (M&A) activity. Despite expectations for an M&A surge under President Trump in 2025, deal volume and value have been largely flat, with only 4,535 deals totaling $567 billion through May. Approximately 30% of private equity investments, part of a $3 trillion portfolio across 30,000 companies, have been held for longer than five years, exceeding typical investment timeframes and frustrating limited partners who anticipate regular returns. To adapt, firms are exploring creative strategies such as partial asset sales and tapping into a recovering IPO market, although cross-border deals, especially with China, remain sluggish. PwC highlights that resolving tariff issues, lowering interest rates, and easing geopolitical tensions are critical to reviving M&A activity and unlocking value for investors.