Global players focused on private equity and asset management are entering the market now with renewed optimism, according to KPMG’s latest CEO Outlook survey. The report, based on responses from 110 executives overseeing firms with annual revenues $500 million (one-third managing over $10 billion), highlights a clear shift from caution to bullish sentiment.
Conducted between August and September 2025 across 11 major markets, the findings had been pointing to falling interest rates, narrowing valuation gaps, and record assets under management as key drivers fueling this positivity.
Overall confidence has climbed notably.
Eighty-three percent of respondents expressed optimism about industry growth, up from 73 percent the previous year, while 80 percent feel positive about their own organization’s prospects.
Nearly one-quarter anticipate earnings growth exceeding 5 percent over the next three years.
Macroeconomic uncertainty remains the top worry for 29 percent, followed by capital access and financial performance at 22 percent.
Despite these headwinds, executives are eager to deploy accumulated dry powder, with active dealmaking and exits expected to accelerate as markets stabilize.
Mergers and acquisitions stand out as a strategic priority.
Eighty-four percent report moderate to high appetite for deals, with half describing it as “high.”
Industry professionals anticipate a surge in both acquisitions and divestitures, driven by sector specialization, platform-building strategies, and rising demand for alternative investments.
Digital transformation and artificial intelligence top the agenda, cited by 23 percent as their primary focus, ahead of employee value propositions and inflation resilience.
Technology adoption, particularly AI, emerges as a central theme.
Two-thirds of asset managers and even more private equity heads identify AI as a top investment area, with 66 percent allocating over 10 percent of non-investment budgets to it.
Ninety percent feel they are keeping pace with advancements, and 74 percent report clear understanding of AI’s competitive benefits.
Applications span deal sourcing, due diligence, portfolio oversight, and client services.
Fraud detection and cybersecurity responses rank highest among expected gains.
Yet risks loom large: 96 percent flag fraud concerns, 89 percent worry about data privacy, and 77 percent cite cyber-attacks as threats.
Quantum computing adds another layer of uncertainty for one-quarter of leaders.
Talent strategies are evolving in tandem.
Sixty-six percent are actively retraining existing staff, with private equity firms showing even stronger commitment at 77 percent.
Hybrid work models persist, as 59 percent expect employees to be in the office three days per week.
Challenges include skill shortages in technical and collaborative areas, with 35 percent struggling to recruit suitable candidates and some competing directly with technology giants.
External partnerships and role redesigns are helping bridge gaps.
Sustainability has moved beyond compliance to become a genuine value driver.
Forty percent now quantify ESG impacts financially, up significantly in private equity.
AI tools are aiding this shift, with 75 percent using them for climate modeling and 72 percent for sustainability data analysis.
Executives emphasize integrating environmental costs into decision-making while maintaining focus on financial returns rather than purely altruistic goals.
KPMG experts note that value creation now hinges on closing valuation gaps through innovation, strategic deals, and workforce upskilling.
While Europe faces calls for streamlined regulation to preserve competitiveness, overall the sector appears well-positioned to capitalize on opportunities in a lower-rate environment.
As one industry professional observed, confidence is directly translating into bolder capital deployment and disciplined exits. The outlook underscores resilience and adaptability, setting the stage for steady activity in private markets.