Private equity (PE) investors have been a powerful force in global dealmaking over the past two decades, driving consolidation, recapitalisations, and growth across industries including mining.
But as the global cost of capital bites, the PE model itself is under stress – and the ripple effects could reshape how miners access funding in the years ahead.
In the shifting tides of global capital, private equity has long held its reputation as a high-stakes, high-return game. But in 2025 and as 2026 nears, the sector is undergoing a rarer recalibration – one driven not by exuberance but constraint.
Mining leaders can expect longer hold periods from private equity partners, and liquidity may come via secondary or recapitalisation deals rather than clean exits.
Valuation realism is critical – deal flow in North America is unlikely to pick up until sellers reset expectations. Critical minerals may buck the trend, drawing a larger slice of private equity’s vast undeployed capital.
Analysis from law firm Ropes & Gray shows the US private equity landscape is now grappling with what may be a multi-year liquidity crunch even as deal flows, fundraising, and exit activity show signs of life.
As capital markets stand at a crossroads, this moment is demanding clarity of strategy – especially for funds, limited partners, and investors eyeing alternative assets under strain.
In part two of this series, Mining.com.au unpacks critical themes emerging in this space and draws lessons for those watching PE’s next chapter.
Ropes & Gray’s September 2025 US Private Equity Market Recap reveals while deal count is down 5% on a year-to-date basis compared to 2024, North American dealmakers believe the market is improving and transaction activity has the potential to accelerate over the coming months.
US private equity deal counts declined for the second consecutive month in August. However, deal value is up 30% through the end of August 2025 compared to 2024.
Over the past few years, the proportion of US private equity deals over US$1 billion has been steadily increasing and the number with a disclosed deal value over US$1 billion has reached almost 40% so far in 2025.
Liquidity remains a key challenge in the private equity space, with low distributions and extended holding periods. Average holding periods for buyout deals reached 6.4 years in 2025, reflecting sponsors’ preference to delay exits rather than exit at lower valuations.
This protracted holding period length is troublesome as private equity tends to have an investment horizon of four to seven years, and funds typically span a decade.
However, exits are improving compared to 2024 but Ropes & Gray note it needs to meaningfully increase to work through the current backlog of portfolio companies.
This contrasts to the flurry of exits seen in Australia. As part one of this series reveals this has been ramping up at their fastest pace in three years, with managers seizing opportunities to crystallise returns amid volatile market conditions.
Meanwhile, in North America the secondaries market is off to a record-breaking start, already eclipsing US$100 billion in aggregate transaction value through H1 2025. Growth is expected to continue, driven by the rising demand for liquidity.
Ropes & Gray reports the secondary market has experienced unprecedented growth in H1 2025, with total deal value growing by 42% compared to H1 2024.
The initial public offering (IPO) market had a strong summer and entered fall (autumn) with a solid pipeline. The private equity-backed IPO market is gaining momentum but still remains below pre-pandemic levels.
There were seven PE-backed IPOs across a range of industries in the summer months between June and August.
Private equity paradox
PitchBook reports that domestically, private equity sponsors in the US owned nearly 12,300 US-based companies (excluding bolt-on deals) in 2024 – up from 7,300 in 2014. PitchBook adds that more than US$1 trillion of available investment capital (cumulative dry powder) by US private equity sponsors in 2024 compared to $350 billion a decade earlier.
However, the decade ahead looks more challenging for private equity on several fronts and evidence of these challenges is now appearing. In essence, private equity’s decade of successes has created the conditions for what lies ahead.
According to FTI Consulting, annual US buyout fundraising from 2020 to 2024 averaged US$275 billion, well above the prior five-year average.
But capital isn’t flowing as freely. Exit opportunities are thin in North America, debt markets more selective, and sponsors are reluctant to part with assets purchased at lofty valuations just before interest rates had its upward march.
For mid-tier and emerging mining companies, this means fewer private equity-backed consolidation plays or growth packages being inked.
Historically, private equity funds aimed to hold a portfolio company for around five years before exit. Today, funds are stretching beyond six or seven years, especially for deals made in 2018–2019.
As FTI Consulting highlights, one reason is that many of those ‘vintage deals’ were made at high multiples. Sponsors are increasingly unwilling to exit at valuations lower than their entry point, especially when debt markets are less forgiving.
And FTI reports anecdotal evidence this is one of the most pernicious constraints – the mismatch in expectations as sellers want to exit at elevated multiples, and buyers are constrained by high borrowing costs, subdued demand, and risk aversion.
Within mining, this may exacerbate fragmentation amid smaller resource players hoping for a private equity consolidation partner to find deal negotiations stuck over fair value in a volatile commodity and interest rate environment.
For mining or resource assets owned by private equity, this could delay divestiture, recapitalisation, or spin-outs of upstream assets, prolonging PE-owned mines beyond the time horizon originally envisioned.
Incongruous investment landscape
As the Ropes & Gray report shows, 2025 has so far delivered a paradox for private equity dealmaking. The number of deals is trending downward, yet total deal value is rising – a sign that capital is concentrating into fewer but larger investments.
Through August 2025, deal volume is up 30% year-on-year, even as deal count has declined for the second consecutive month. Among those deals, the share with disclosed values above US$1 billion nudged toward 40%.
The takeaway? The middle market is under pressure. Smaller deals are harder to structure amid tighter financing conditions, while large platforms are better placed to source scale, negotiate debt, and absorb volatility.
Yet to some degree such deals have been occurring. In June 2024, specialist mining PE/financier Orion Resource Partners acquired a 14.51% stake in then TSX-listed Skeena Resources as part of a broader US$750 million financing package to advance Eskay Creek.
There was a partial sell-down later with Orion selling some Skeena shares in transactions reported in December 2024.
That same year in February, Orion began investing in Capstone Copper Corp (TSX:CS). Capstone announced a bought deal equity offering of 59.52 million shares at C$6.30 per share for gross proceeds C$375 million.
Orion later reduced/realised part of its position via the bought deal (publicly sold shares as part of the offering).
Liquidity logjam: Exit drought
With IPO markets subdued and strategic sales patchy, PE managers are turning to alternative liquidity paths such as secondary market sales at discounted valuations; dividend recapitalisations, where sponsors extract cash by re-leveraging mature companies; and fund managers buying out limited partners at discounts to provide exits.
For mining resources projects, these tools may still unlock cash although as the latest industry reports show, the cost may be higher, whether through steeper discounts or greater leverage on already cyclical businesses.
Across the market, valuation expectations remain miles apart. Sellers want yesterday’s multiples, while buyers are pricing deals on today’s cost of capital.
This mismatch is causing deal inertia, particularly in cyclical sectors like mining where commodity price volatility makes valuations even harder to pin down.
Until those gaps close, resource companies may find themselves waiting longer for the next wave of sponsor-driven consolidation.
Europe is also facing a liquidity logjam and a dearth of exits by private equity.
The Financial Times reports large private equity groups want to raise three times as much capital in Europe in 2026 as they are likely to secure in 2025. This, the publication says, is setting the scene for a shake-out for the sector “at a time when many investors have been starved of returns”.
Reports suggest plenty of cash is still flowing into private equity, meaning buyout firms continue snapping up portfolio companies. There are estimates that the UK in particular has a backlog of more than 2,700 companies seeking a new home.
In 2025, there have reportedly been six funds aiming to raise €3 billion or more and these are expected to manage combined commitments of roughly €34 billion. In 2026, some 10 large private equity funds are forecasted to hit the market, aiming to raise in excess of €110 billion.
PitchBook notes exits are now the UK private equity industry’s “weakest point”. In H1 2025, exits were down 12% compared to the same period in 2024, which were then down more than 50% half from the year before that.
Dealmaking DNA: Surging or spiralling?
The fabled history of private equity is such that firms could borrow capital cheaply, take hold of companies with battered valuations, and with some financial finessing and management nous, go and sell them again – at a lofty premium.
While in 2025 the private equity landscape might not deliver fireworks, the pressure is reshaping the industry’s DNA. As mentioned, liquidity remains the choke point.
The secondary market has moved from back-channel to front-line. Deal counts are down but as mentioned, ticket size is rising. And managers are repositioning themselves – not just to survive but to lead in a leaner, more concentrated architecture.
Questions once centring around where returns will come from are now shifting to focus on capital flow, reflow, and flex in what’s becoming a stricter, more disciplined era.
A decade ago, private equity sponsors were flush with capital and rushing to invest. FTI Consulting’s review shows that US buyout fundraising from 2020 to 2024 averaged around US$275 billion annually – versus US$185 billion in the prior five years, reflecting a serious tailwind.
As a result, dry powder – or unspent capital – remained just above US$1 trillion for several consecutive years.
Yet, paradoxically, the same capital is not finding as many exits. PE firms are holding investments longer, reluctant to sell until valuations rebound. This ‘exit problem’ is compressing turnover cycles.
For resource companies, this means fewer private equity-backed consolidation plays or scalable roll-ups may occur, because sponsors are expected to be less willing to deploy capital into risky, cyclical sectors unless they can see a clear path to exit.
In Canada, some of the financing difficulties juniors felt in 2023 continued into 2024, with many reporting equity markets not being favourable despite record metal and mineral prices.
Critical minerals-focused companies have been particularly affected, with many not enjoying the favourable price environment experienced by precious metals companies.
A recent survey by the Canadian Climate Institute shows 87% of respondents agree the current level of investment to be insufficient to grow Canada’s critical minerals value chain.
Over the past few years there has not been as much capital flow into institutional investor funds in Canada focused on metals and mining as the market has been accustomed to.
As such, Canada’s relevance as a source of private equity and institutional investor capital in this space has been negatively affected.
Implications for mining
This reset in private equity while challenging, is also creating opportunities.
Battery minerals and energy transition projects are high on investor radars, and sponsors still sitting on record dry powder will eventually need to deploy. Analysts agree that the hurdle miners face is tougher deal terms, tighter governance, and more selective capital partners.
For mining executives, understanding private equity’s recalibration is critical. The sector remains attractive but capital is expected to be more disciplined, and timelines more drawn out.
While the Ropes & Gray report is US-centric, the themes resonate globally – and especially for Australian investors watching how alternative capital evolves.
Liquidity is uncomfortable, not abnormal. Private equity in regions like Australia is reckoning with longer fund life cycles, distributions delays, and the necessity of secondary tools.
Managers that can provide sector expertise, such as for specific resources, clean energy, ESG mining technologies, or can connect with global networks are poised to have a clearer path.
In mining and energy-linked transitions, capturing capital flows into decarbonisation, battery, grid, and critical minerals infrastructure may unlock outsized returns.
Private equity players
Mining.com.au has collated some notable PE-backed investments from recent times and identified some of the most active firms in the space.
Notably, Rob McEwen in August 2024 was a 19.9% owner of Borealis Mining (TSX-V:BOGO), having bought a block of shares from private equity fund Waterton Global Resource Management. As of Q3 2025, McEwen’s shareholding was about 14%.
Waterton is a private equity firm specialising in the metals and mining sector. The firm’s unique, integrated institutional platform combines in-house project evaluations, mining operations, and asset management expertise to generate superior returns for its investors.
In May 2025, Canada Growth Fund announced its cornerstone participation in a $350 million strategic non-brokered private placement by copper miner Foran Mining (TSX:FOM). Canada Growth Fund agreed to commit some $156 million alongside co-investors including blue chip miner Agnico Eagle Mines (TSX:AEM), and certain affiliates of Fairfax Financial (TSX:FFH).
Foran’s flagship asset is the 100% owned McIlvenna Bay Project – a polymetallic deposit along the Flin Flon Greenstone Belt and Canada’s only copper and zinc deposit currently under construction.
Meanwhile, specialist mining private equity firm Resource Capital Funds (RCF) invests in a bunch of mining companies including Aurum Resources (ASX:AUE), Azure Minerals (ASX:AZS), Inca Minerals (ASX:ICG), Kincora Copper (ASX:KCC), Pacgold (ASX:PGO), SPC Nickel (TSX-V:SPC), and Tinka Resources (TSX-V:TK).
Red Cloud Capital invests in Eloro Resources (TSX:ELO) and Silver X (TSX-V:AGX), among many others. The firm has over the years been involved with financings for companies such as Brunswick Exploration (TSX-V:BRW), Cassiar Gold Corp (TSX-V:GLDC), Patagonia (ASX:PL3), Power Metallic (TSX-V:PNPN), and Skyharbour Resources (TSX-V:SYH).
Another firm active in mining is Denham Capital, which finances and supports management and projects in metals and minerals that play a critical role in the energy transition, supply chain security, and in the increasing technological footprint of society.
Its preferred entry point are projects that are at maximum two years from first production, or already in construction, ramp up or in production, and require capital for development, expansion and other value accretive activities.
Denham can invest anywhere on the capital stack, ranging from ordinary equity, to preferred equity and subordinated or senior debt. The firm invests in Pembroke Resources and Incoa Performance Minerals, among others.
Tembo Capital invests in and supports mining companies currently in the evaluation, development and production phases, providing capital to bring discoveries into production, to expand existing production or to acquire assets. Tembo Capital aims to grow a strong and diversified investment portfolio focussing on low cost, quality assets managed by experienced, high calibre teams.
Another firm active in the space is Sentient Equity Partners, which holds investments in companies such as Brazil Potash (NYSE:GRO), Iron Road (ASX:IRD), and Tinka Resources.
CPP Investments is globally invested in private equity, including external funds through primary fund raising and the secondary markets and direct investments including Hitachi Metals (TYO:5486) and KoBold Metals.
And Triangle Resource Partners is a global investment firm, providing boutique private lending to the mining industry. Its mission is to empower mining companies with customised financial solutions, enabling them to thrive while operating to the highest standards of environmental, social and governance (ESG) practices.
In terms of the advisory firms helping PE drive and ink deals, for TSX-V and TSX-listed mining companies, firms such as BMO Capital Markets, Canaccord Genuity, RBC Capital Markets, CIBC World Markets, Scotiabank/BNN (Scotia), National Bank Financial, and TD Securities tend to dominate large M&A, bought-deals, and equity capital markets work.
Specialist Canadian broker-dealers and boutique mining investment banks such as Canaccord Genuity, Red Cloud Securities, Haywood Securities, and PI Financial (Ventum as of 2024), often lead financings and advise on smaller deals.
Write to Adam Orlando at Mining.com.au
Images: Ropes & Gray, Unsplash & Mining.com.au
