Follow the Money as US Investment Dollars Move Slowly Overseas

If you follow the money in US private equity, you may end up outside the US, either in Europe, Japan or India.

Or so goes the conversations on Zooms and industry panels in my world over the last 12-18 months. That talk has not slowed down as we head into year end, which makes now perhaps a good time to tally deals and look into some of the third-quarter earnings transcripts and interviews to find out what some of the “bigs” are doing and saying.

Why are US firms reallocating abroad? For starters, overseas markets have an abundant supply of large, complex deals, from European carve-outs to Japan take-privates while the pipeline in the States has dwindled a bit or at least has become a little more difficult to uncover and diligence.

Next, US investors are looking to diversify their holdings and so turn outside the borders with the economic outlook either uncertain (when and by how much will rates decline?) or conditions too volatile (tariff whipsaw and government shutdowns).

And of course, there is the big growing need for secular capital tied to energy transition, digital infrastructure and defense worldwide, especially in Europe – all fueled, as has been well stated, by the private capital.

Let’s take a look at some of the numbers and see how much has happened or is expected to happen.

On the impressive side, KKR invested a record $20 billion in Europe so far this year, with over $10 billion from buyouts alone. In a Financial Times article covering the IPEM conference in Paris in September, the Co-head of European PE Philipp Freise called this a “pivotal moment” for a Europe that needs the funding for underinvestment in key industries such as defense. Funds that were likely slated for the US are just now being rediverted to the continent, he and others have said.

But there’s more to come: Blackstone has reportedly said it plans to invest up to $500 billion in Europe alone over the next decade, signaling a long runway of US sponsor dollars.

Other recent examples include KKR’s $6.4 billion acquisition of Spectris plc, the UK scientific instruments company and the biggest UK takeover of the year; Blackstone’s $3.4 billion to $3.5 billion tender offer of TechnoPro Holdings, a Japan IT/engineering services company and the PE firm’s largest investment ever in Japan; and Blackstone again with a $2.4 billion to $2.5 billion investment in Proudreed French Industrial, a logistics platform and one of France’s largest such transactions in recent years. And in India earlier this year, New Mountain Capital took a majority interest (70% to 75% stake) in Access Healthcare Services

That starts appearing like a pretty good tally.

The typical drivers are behind this tilt, but some generational issues may also be at play. As one observer noted, “The younger generation in SE Asia recognizes that private equity represents a more stable and long-term source of finance compared to banks, which can take the umbrella away if it starts to rain.” Not safe to ever predict clear skies ahead but diversification and value creation can always be all-weather protection no matter the conditions

So fair to say, US sponsors are starting to take a bigger slice of Europe but according to Pitchbook, US investors participated in 19 percent of all European PE deals in the first half of 2025, compared with 17.9 percent in 2024. A bigger take but only by a small margin.

Analysts say they expect US investors to take an even bigger slice of Europe (and Japan and India) next year but probably don’t expect too big of a slice. History and data show interest still seems to be fixed on the US market.

Mark Kollar
Partner, Prosek Partners

Mark Kollar’s monthly Letter from America can be read at The Alternative Investor.