In 2025, French private equity and infrastructure firms invested 36.4 billion euros in 2,904 companies and projects. Despite a modest 1% decline compared with 2024, these figures reflect a market that remains active in an environment characterized by higher interest rates, challenging exits, and increased selectivity.
Private equity in France is undergoinga phase of normalization rather than a structural crisis. Capital raising remains strong, investments are holding up, and long-term performance remains positive. However, divestitures remain insufficient, distributions to investors have slowed, and capital is increasingly concentrated among the most established management firms.
This overview analyzes the French market’s figures, its key strategies, performance, risks, and outlook. It also helps explain why fund manager selection and diversification remain central to an asset class where averages mask widely varying situations.
What are the figures for private equity in France?
According tothe industry report published by France Invest and Grant Thornton, French firms raised 42.9 billion euros in 2025. Fundraising increased by 10% compared with 2024, despite a still challenging environment.
Investments totaled 36.4 billion euros, down 1 percent. This figure combines private equity and infrastructure projects tracked by the study. It should therefore not be interpreted as the sole amount invested in the equity ofunlisted companies.
Divestitures totaled 14 billion euros at historical cost, up 9 percent. However, the number of transactions declined, indicating that the recovery remains partial.
Disposal amounts are stated at historical cost. They represent the amount initially invested in the disposed-of assets, not the total proceeds received from their sale. Therefore, they cannot be directly compared to the capital raised or to the economic value of the disposals.
How are investments changing?
Generally sturdy posts
In private equity (excluding infrastructure), investment amounts are expected to increase by 11% in 2025. However, this increase is largely driven by follow-on funds. Excluding these transactions, investments would decline by 1%.
This distinction is essential. A continuation fund generally allows for the transfer of one or more companies from a fund that has reached maturity to a new vehicle managed by the same management company. Some investors may choose to cash out, while others opt to maintain their exposure.
These transactions are a response to the slowdown in traditional exits. They can also give a “ Fund manager ” more time to continue developing a business. However, they require rigorous governance, as the same “ Fund manager ” may be on both the seller’s and the buyer’s sides.
Different dynamics depending on the strategies
Venture capital holds steady in 2025, while growth capital expands , driven in particular by the internationalization of investments. Development capital slows, and succession capital remains active, supported in part by continuation funds.
These differences reflect the diversity of the private equity sector in France.
- Venture capital funds finance young, often unprofitable, and highly innovative companies.
- Growth capital supports established companies.
- A buyout typically targets more mature companies, sometimes involving the use of debt.
Each strategy reacts differently to interest rates, the economic cycle, and valuation conditions. Therefore, a dynamic market in one segment does not mean that the entire asset class is moving in a uniform manner.
Why do fundraising efforts remain concentrated?
With 42.9 billion euros raised in 2025, fundraising in France remains strong. It has benefited in particular from commitments from the public sector and several large-scale fundraising efforts.
However, this strength masks a growing concentration of capital. Institutional investors are increasingly favoring established platforms, teams with a long track record, and strategies that can demonstrate their unique value proposition.
This polarization is also evident on a global scale. According to PwC’s 2026 Outlook, the largest asset management firms continue to attract significant amounts of capital, while many smaller players are facing greater challenges.
The concentration of fundraising does not mean that the largest funds are systematically the best-performing ones. Rather, it reflects a focus on operational stability, team depth, diversification, and the ability to invest in a complex environment.
For emerging asset management firms, the challenge is to demonstrate a clear competitive advantage: sector expertise, proprietary access to transactions, geographic specialization, or distinctive operational capabilities.
Are divestitures the main challenge?
Distributions Are Still Insufficient
Sales rose 9% in value at historical cost in 2025, but the number of transactions declined. France Invest believes that the market continues to be hampered by difficult economic conditions and a persistent gap between the prices sellers expect and those buyers are willing to pay.
This situation directly affects investors. As long as an asset has not been sold, its value remains largely an estimate. Distributions are delayed, and capital remains tied up for longer.
The slowdown in distributions is also affecting new fundraising. Institutional investors often reinvest a portion of the proceeds from divestitures. When these cash flows decline, their ability to make new investments may be limited.
The DPI, which measures actual distributions received relative to called-in capital, therefore becomes particularly important. A TVPI high DPI is not enough if most of the value remains concentrated in unsold shares.
The Growth of Continuation Funds
Follow-on funds have become an important response to the slowdown in exits. They make it possible to extend the holding period for companies whose potential for value creation is not considered to have been exhausted.
These vehicles can provide liquidity to investors who wish to exit, while allowing others to maintain their exposure to the asset. They also offer a solution when stock markets or industrial buyers do not allow for a sale on favorable terms.
However, their development should not be viewed as a risk-free solution. The terms of valuation, conflicts of interest, and the quality of the competitive process must be carefully examined.
PwC estimates that secondary transactions and continuation vehicles are likely to remain central to exits in 2026. They alleviate pressure on liquidity, without completely replacing industrial divestitures, sales to other funds, or initial public offerings.
What is the long-term performance?
Net performance is returning to normal
As of the end of 2025, the French private equity sector posted a net IRR e of 10.7% per year over a ten-year period, according to the annual study by France Invest and EY. Since these measures were first introduced in 1987, the net IRR e has reached 10.8%.
These figures are calculated net of management fees and carried interest. They represent an average for the asset class and do not reflect the performance of each individual fund.
The ten-year performance remains higher than that of several listed indices, which have been adjusted using a methodology designed to align their cash flow schedules with those of private equity funds. The gap with the CAC 40 has narrowed, however.
This trend reflects a return to normal after several particularly favorable years. Higher interest rates have made financing acquisitions more expensive, while the slowdown in divestitures has delayed the realization of capital gains.
Long-term average performance is neither an expected return nor a guarantee. Nor does it reflect tax implications, eligibility requirements, or any additional fees that may be incurred through an intermediary vehicle.
Significant differences among the funds
The performance of private equity depends heavily on the management firm, the strategy, and the fund’s launch year. Two funds launched in the same year can produce very different results due to their selection of companies, their acquisition prices, their debt levels, or their ability to provide operational support.
The analysis of a fund must therefore consider several indicators. The IRR measures annualized performance while taking the timing of cash flows into account. The TVPI s the distributed and residual value to the capital called. The DPI measures only distributions already received.
The proportion of realized value is particularly important in the current environment. A fund may report a high “ TVPI ” even though few assets have been sold. Its performance therefore still depends on estimated valuations and future exit conditions.
The selection of fund managers therefore remains crucial. It involves analyzing the stability of the team, the consistency of results, losses, the value-creation strategy, and the ability to replicate performance from one year to the next.
Which sectors attract capital?
Industry, digital technology, consumer goods, and healthcare are among the main sectors funded by French investors in 2025. Their prominence reflects both the structure of the economy and the major transformations sought by the funds.
Digital remains an important component, but investors are becoming more selective. Revenue growth alone is no longer enough. Recurring revenue, profitability, customer retention, and the ability to integrate artificial intelligence now play a central role in the analysis.
The healthcare sector is benefiting from structural trends related to an aging population, medical innovation, and the transformation of services. However, it remains exposed to regulatory, technological, and reimbursement risks.
The industry is also drawing attention amid concerns about sovereignty, reindustrialization, and the modernization of production lines. Funds can support automation, decarbonization, external growth, and the international expansion of industrial companies.
Finally, renewable energy infrastructure accounts for 47% of the total investment and 63% of the infrastructure projects supported in 2025. These investments address long-term needs, but their profile differs from that of traditional private equity.
What role does it play in the French economy?
Private equity provides financing to companies at various stages of their development. It provides not only capital but also expertise in governance, recruitment, acquisitions, digital transformation, and international expansion.
According to France Invest’s impact data as of the end of 2024, more than 11,000 companies were included in the portfolios of French investors. They accounted for approximately 2.5 million employees.
The majority of the companies we support are small and medium-sized enterprises (SMEs) and mid-sized companies. Private equity thus plays an important role in financing companies that do not always have access to the stock markets or that are seeking an active shareholder.
This contribution should not be limited solely to the amounts invested. Value creation depends on the funds’ ability to support sustainable growth, professionalize organizations, and prepare companies for changes in their industry.
It must also be evaluated critically. A strategy based on excessive debt, short-term cost-cutting, or unrealistic growth assumptions can weaken the company rather than strengthen it.
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