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How Blackstone and KKR Are Winning PE Funds Amid a Slowdown

Paul Allen

04 Dec 2025 • 7 min read

Private equity fundraising is down nearly 30% this year, with just $259 billion raised, yet the 10 largest funds claimed almost 46% of that capital, according to PitchBook. The leading funds include giants like Blackstone, Thoma Bravo, and Bain Capital, whose scale keeps growing despite the overall slowdown. But this isn’t a simple flight to larger funds—it’s a flight to those with deep experience and entrenched systems. In private equity, experience and scale compound to create near-insurmountable barriers for newcomers.

Why betting on size and experience beats chasing new funds

Conventional wisdom says downturns level the playing field for emerging funds to attract investors seeking fresh opportunity or dislocated assets. The reality is the opposite: asset allocators double down on what they know, funneling capital to managers with at least 10 closed funds under their belt. This “flight to experience” saw 61% of 2025 capital flow into these firms, exceeding the recent five-year average of 58%. Meanwhile, first-time funds hit a record low—only 41 closed, raising about $8.4 billion, far below prior years.

This dynamic mirrors structural leverage failures in other sectors where legacy advantage wins over innovation absent a radical constraint shift. Similar to how OpenAI scaled ChatGPT through entrenched data and compute infrastructures rather than new apps alone, top PE funds leverage their track records and relationships—a self-reinforcing moat. See how structural leverage failures hold innovation back even in growth markets.

Big funds convert scale into capital consolidation and deal advantages

The largest funds don’t merely compete on brand; their scale changes the fundraising game. For example, the top three funds have raised $60.4 billion this year, capturing 23.3% of all capital raised, up from just 15% last year. This compression means fewer, but more powerful, players command the market, squeezing out mid-tier competition.

Funds like Blackstone Capital Partners IX ($21 billion) and Thoma Bravo Fund XVI ($24.3 billion) harness operational systems for mass fundraising while deploying capital with network effects in asset acquisition. This system-level advantage lowers per-deal transaction and monitoring costs, creating compounding returns unavailable to smaller rivals who pay significantly higher costs for limited capital pools. Contrast this with mid-sized funds, losing their ability to access quality deal flow at scale.

Compare to other sectors where winning players embed their systems into workflows. For instance, OpenAI’s growth wasn’t just about AI models but building scaling infrastructure and user acquisition engines few can replicate. PE’s biggest firms operate similarly—with fundraising and deal sourcing engines that function autonomously once set.

Experience and repeat funds create a compounding moat that reshapes fundraising

The fundraising slump creates a severe constraint: asset allocators must minimize risk, favoring managers they trust with proven track records. Firms with multiple fund closures benefit from data, operational improvements, and refined processes, creating execution advantages without proportionally higher fundraising effort.

This compounding advantage differentiates Blackstone and Thoma Bravo from newer entrants and explains why the number of new funds underperforms despite the industry's size growth. It’s no surprise that times of stress highlight the endurance of systemic advantages rather than raw opportunity. As a result, newcomers face higher barriers to entry, knowing they compete not just on strategy but against embedded network effects.

See parallels in how industries unlock growth through deeply integrated systems rather than episodic innovations, like in operational shifts at USPS that reshape cost structures.

Who wins as private equity consolidates around elite funds?

The key constraint is capital allocation risk: in a down fundraising market, LPs prioritize combat-tested managers, reinforcing a winner-take-more dynamic. This makes fundraising a compounding system where top firms get easier and cheaper access to capital, enabling further scale and deal flow advantages.

Operators in private equity must rethink strategies. Building repeatable systems for fundraising, improving transparency and execution, and developing long-term LP relationships create leverage. Countries with growing private equity markets must adopt regulatory and infrastructure models that support scale while fostering new entrants to avoid oligopoly traps.

“Experience turns capital into a fortress, not just a fund.” This shift challenges assumptions that downturns democratize access and signals a fundamental evolution in how private equity systems generate advantage.

As private equity players leverage their experience and systems to consolidate capital, having the right data at your fingertips becomes crucial. Tools like Apollo not only provide access to an expansive B2B database but also enhance sales intelligence, allowing firms to reach the right investors and partners efficiently. This strategic advantage is essential in a competitive fundraising landscape. Learn more about Apollo →

Full Transparency: Some links in this article are affiliate partnerships. If you find value in the tools we recommend and decide to try them, we may earn a commission at no extra cost to you. We only recommend tools that align with the strategic thinking we share here. Think of it as supporting independent business analysis while discovering leverage in your own operations.

Frequently Asked Questions

Why is private equity fundraising down nearly 30% in 2025?

Private equity fundraising declined by nearly 30% this year, reaching $259 billion, due to a market slowdown and increased capital allocation risk from limited partners prioritizing experienced managers.

The 10 largest private equity funds claimed almost 46% of the capital raised. Leading funds include Blackstone, Thoma Bravo, and Bain Capital, leveraging their scale and experience to dominate the market.

How does experience impact fundraising success in private equity?

Funds with managers who have closed at least 10 funds attract 61% of capital in 2025, exceeding the five-year average of 58%. Experience creates trust for investors and a compounding moat that newcomers find hard to overcome.

What advantages do large private equity funds like Blackstone and Thoma Bravo have?

Large funds such as Blackstone Capital Partners IX ($21 billion) and Thoma Bravo Fund XVI ($24.3 billion) use operational systems for efficient fundraising and deal sourcing, lowering transaction costs and creating compounding returns unavailable to smaller funds.

Why are first-time private equity funds underperforming?

First-time funds hit a record low with only 41 funds closed, raising about $8.4 billion, due to investors favoring combat-tested managers and the barriers created by entrenched networks and scale advantages of established firms.

How does private equity fundraising resemble other sectors like tech or postal services?

Private equity's system-level advantage mirrors sectors such as OpenAI’s scaling of ChatGPT and operational shifts at USPS, where deeply integrated systems create structural leverage that limits disruption from new entrants.

What strategy should new private equity firms adopt in this environment?

New firms should focus on building repeatable fundraising systems, transparency, execution, and long-term relationships with limited partners to gain leverage despite high barriers from entrenched large funds.

What is the impact of consolidation around elite funds on the private equity market?

As private equity consolidates around a few elite funds, capital allocation risk rises, creating a winner-take-more dynamic where top firms get easier access to capital and deal flow, squeezing out mid-tier competitors.