"Korea's PE Market Sees Smaller Deal Volume but More Deals Last Year, Centered on the Middle Market"

Samjong KPMG report

Last year, as investments in the Korean private equity (PE) market were focused on the middle market, the total investment volume decreased while the number of deals increased.

According to Samjong KPMG's recently published report, "Global PE Investment Analysis and 2026 Outlook," Korea's PE investment volume last year was 12.9 billion dollars (approximately 18.82755 trillion won), down 26.1% from the previous year's 17.4 billion dollars. The number of investments was 145 deals (137 deals in the previous year), an increase of 5.8% year-on-year. Samjong KPMG analyzed that, in the case of large deals, due diligence and decision-making were delayed due to policy and political uncertainty, leading domestic general partners (GPs) to continue focusing their investment activities on the middle market. In particular, foreign GPs stood out, with 4 out of 5 big deals worth 1 trillion won or more being led by overseas GPs. Investments were made mainly in growth sectors such as artificial intelligence (AI), digital infrastructure, healthcare, and consumer goods, but exit activity remained limited due to a lack of domestic strategic acquirers and sluggish initial public offering (IPO) markets.

The total volume of global PE investments was tallied at 2.1514 trillion dollars. This represents an increase from the previous year's 1.8663 trillion dollars and is the highest level since 2021 in terms of invested amount. The number of transactions was 19,093, down from 20,836 in the previous year, marking a decline for the second consecutive year. This is interpreted as a strategy of focusing on large deals involving proven high-quality assets rather than numerous small transactions. As corporate carve-outs for business restructuring and the use of add-on strategies as a key value-creation tool for PE became more active, capital-intensive and large-scale deals drew more attention than before.

By region, the Americas accounted for more than 55% of global PE investments, maintaining the largest share. PE investment volume in the Americas was 1.2 trillion dollars with 9,118 deals, and within this, the United States recorded 1.1 trillion dollars (8,232 deals), solidifying its position as a core pillar of the global PE market. The Europe, Middle East and Africa (EMA) region attracted 729.9 billion dollars in investments, with investment volume increasing year-on-year, but the number of transactions decreased to 8,278. It is analyzed that the investment trend centered on large buyouts and buy-and-build strategies has strengthened further. PE investment volume in the Asia-Pacific (ASPAC) region was 144.9 billion dollars, a slight increase from the previous year. In particular, Japan recorded an all-time high of 51.8 billion dollars, driving the overall investment flow in the region, while China saw both investment volume and the number of deals contract due to macroeconomic and geopolitical uncertainties.

In global PE investment sectors, the technology, media, and telecommunications (TMT) field attracted the largest amount of investment at 654 billion dollars, marking the second-highest annual investment volume on record after 2021. This was followed by industrials and manufacturing (327.6 billion dollars), energy and natural resources (276.5 billion dollars), and consumer goods and distribution (262.2 billion dollars) in terms of investment share.

In 2025, the size of the global PE exit market was about 1.2637 trillion dollars, the second highest in the past 10 years. However, the number of exits was 3,162, the lowest in five years, indicating that many long-held assets remain stuck in the market. The volume of exits through IPOs was 324 billion dollars, the highest level since 2021, with the United States and Europe accounting for most of it at 149.6 billion dollars and 100.8 billion dollars, respectively. In contrast, the recovery of IPOs in the Asia-Pacific region still appears to be limited.

On the fundraising side, global PE capital raised was recorded at 405.2 billion dollars (540 funds), showing the weakest trend in recent years. This is attributed to the expansion of long-held portfolios and the accumulation of weak exit activity, as well as a concentration of capital in large, high-quality PE funds, which has eroded limited partners' capacity for new commitments.

Jinwon Kim, Vice Chairman of Samjong KPMG, said, "In 2025, despite a decline in the number of deals, the global PE market saw an expansion of investments focused on mega-sized and high-quality assets, supported by abundant dry powder," and added, "In 2026, PE investments are expected to become more active thanks to dry powder and the potential improvement in financing conditions, while pressure to exit portfolios will increase due to the growth in long-held portfolios."

He continued, "In the domestic market as well, driven by the full-scale operation of the National Growth Fund in 2026, an increase in M&A, and a recovery in the IPO market, PE managers' activities are expected to gradually recover not only in the middle market but also in large deals," adding, "It is an important time for domestic PE to reestablish its status as venture capital through responsible management and enhanced transparency, and to further advance AI-based value-creation strategies."

This content was produced with the assistance of AI translation services.