The new Private Capital M&A Group will use a variety of the bank’s resources to help private equity firms monetize their portfolio companies, according to the report.
Bank of America is launching this team at a time when the initial public offering (IPO) and exit market is unpredictable and private equity firms are holding a record number of portfolio companies, holding unsold companies longer and looking for ways to monetize them, per the report.
“The pace of sponsor exits has been structurally low over the past few years, and by definition it will need to rebound,” Eamon Brabazon, co-head of global mergers and acquisitions at Bank of America, told Bloomberg. “This means that sponsors will account for a greater share of the M&A pie going forward.”
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It was reported in February that in 2025, private equity firms returned fewer profits to their investors for the fourth consecutive year, with the industry sitting on $3.8 trillion in unsold assets and struggling to raise cash for new funds.
The value of deals last year climbed 44% from 2024 to $904 billion, though it had little effect on the industry’s “dry powder,” or money on hand to invest. Total transactions were down 6%.
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It was reported in August that private equity operations were struggling to raise funds despite offering investors unheard-of incentives.
At the time, fundraising among private equity firms was down by almost a third from unprecedented levels in 2021. Higher interest rates and slowing dealmaking left private equity outfits unable to sell off trillions of dollars worth of aging investments, leading to increasing frustration among investors as well as investors’ refusal to back funds.
In June, it was reported that private equity groups were sitting on $1 trillion in unsold assets and that those represented capital that in a normal market climate would have been given back to investors.
The report said that high interest rates, the White House’s stop-and-start tariff policy and geopolitical turmoil had eaten away at company valuations, leading to firms holding onto their portfolio businesses much longer than anticipated.
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