French public markets in Q3 have reportedly clawed back their losses from the early-quarter tariff shock, however, private markets still lagged as sponsors took a wait-and-see approach. This, according to a recent research report from PitchBook which also noted that deal activity slowing and fundraising cooled during the quarter. And sector selection is now critical amid “rising policy and trade uncertainty.”
In Q3 of 2025, France’s economic momentum remained somewhat fragile. This, as estimates suggested a QoQ GDP increase of around “0.3%, following modest gains in the prior quarter, a pace that underscores continued softness in domestic demand.”
Consumer prices continued to move higher, with the Consumer Price Index rising roughly 0.9% YoY in August, while inflation expectations for the coming year remained anchored “at around 2%.”
On the labour front, the unemployment rate held “close to its Q2 level, around 7.5%.”
Meanwhile, Purchasing Managers’ Index surveys reflected a somewhat negative picture: Both manufacturing as well as services PMIs stayed below the 50 threshold, indicating “contractionary conditions and diminished business
confidence.”
The appreciation of the euro throughout the year continued to “weigh on the competitiveness of French exporters.”
Domestically, companies remained somewhat cautious, further delaying capital expenditure amid policy uncertainty and weak demand. At the European level, the EU and the US agreed on a uniform “15% tariff on most EU exports to the US, down from the 20%” initially announced on “Liberation Day.”
Finally, the European Central Bank cut rates once during the quarter, though policymakers have since adopted “a wait-and-see stance before considering further moves.”
PE deal activity in France declined for the second consecutive quarter, marking one of the “weakest periods in the past five years, despite rebounding elsewhere in Europe.”
Investor caution in Q3 of 2025 was evident in the growing share of add-on deals, reflecting a preference for “smaller, lower-risk transactions over large-scale LBOs.”
The report from PitchBook also mentioned that the largest deal of the quarter was “the sale of Artefact in a sponsor-to-sponsor transaction, with Ardian selling the company to Cinven for €1.1 billion.”
