Electronic Arts(US:EA) Benzinga·2025-12-24 13:13Core Insights - The U.S. private equity market has demonstrated resilience with a significant increase in deal activity during Q3 2025, despite previous uncertainties and volatility [1] Deal Activity - The deal value in the U.S. private equity market reached $331 billion, marking a 28% increase from the previous quarter and a 38% rise year-over-year, according to a HarbourVest report [2] - The deal count increased by 3.7% from Q2 and nearly 12% from Q3 2024 [2] Financing Conditions - Interest rate cuts in September and October have contributed to reduced acquisition costs, acting as a significant tailwind for deal activity [2] Valuations and Exits - Private equity managers have maintained discipline on valuations, with the average U.S. EV/EBITDA buyout multiple decreasing to 12x from 12.8x in 2024, aligning closer to pre-pandemic levels [3] - Exit values dropped 41% in Q3 compared to Q1, totaling $126 billion, although U.S. exit values for the year had already surpassed the full-year total for 2024 by the end of Q3 [3] Market Confidence - The confidence in the U.S. private equity market is reflected in the synchronized rally of major firms like KKR, Apollo Global Management, and Blackstone, ahead of anticipated Fed rate cuts [4] - A strong performance in the stock market has also indicated investor confidence in the U.S. market [4] Shareholder Returns and Failures - Partners Group Private Equity is preparing for one of its largest shareholder-return programs in years, driven by successful exits [5] - However, the trend of continuation vehicles (CVs) has faced setbacks, with major financial institutions expected to incur a combined loss of $1.4 billion on an investment in a portable toilet rental company [5] Landmark Deals and Investments - Notable deals, such as the $55 billion take-private of Electronic Arts by a global investor consortium, underscore the market's size and investor conviction [6] - There is an acceleration in infrastructure investments, particularly in digital assets and energy transition projects, attracting substantial private capital [6] Future Outlook - The U.S. private equity market is anticipated to see accelerating deal-making in 2026, with private credit emerging as a core financing source and strong capital inflows into infrastructure [7] - Liquidity is expected to be a key theme for private markets in 2026, transitioning from short-term stress to long-term structural changes [8] - Investors are likely to focus on scalable, differentiated AI platforms, while new investment vehicles will broaden access to private markets for a wider range of investors [8]