Davis Polk partner and Private Equity practice co-head Bill Chudd discussed the state of the private equity deal market over the past year with Law360.

“I think private equity clients were thinking that 2025 was going to be potentially a banner year. With Trump coming in, they thought maybe for the first time, that valuation gap that we’ve seen over the years on exits was going to close as buyers may be taking more risk,” Bill explained.

“I was very optimistic coming into the year, and then 2025 didn’t really play out that way,” he added. “With the tariffs and other economic uncertainty, global political situations, all of that, I think [it] had the effect of actually causing private equity firms to probably have to retrench a little bit and maybe worry about their portfolio more than they otherwise would have.”

Bill noted that he has seen clients execute more “interesting or novel” transactions throughout the year, such as corporate carve-outs or a private equity firm combining one of their businesses in a joint venture with a subsidiary of a public company. “People are really thinking out of the box about new transaction styles to create value,” he said. “Instead of trying to exit in this market, they’re trying to do something else and then maybe exit in two to three years from now once that combination happens and the synergies are created.”

“It is kind of like in COVID-19, when there was all of that uncertainty. It takes a while for the market to sort of get their arms around it, but then at some point in time, the market does figure out that we’re just living in a world of uncertainty now. There may be a push to do deals, especially at the end of this year, that weren’t happening at the beginning of the year because firms want to show that they’ve been able to deploy capital,” Bill explained.

“PE Attys Get Creative As Uncertainty Dampened Deal Market,” Law360 (December 19, 2025) (subscription required) 

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