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There is a reason mile markers are placed along the course of a marathon. For runners, knowing they still have 20 miles to go, no matter how daunting that may be, is better than guessing. It allows them to make decisions: slow down, speed up, evaluate how much they have left in the tank. For investors, too, any degree of certainty, any morsel of knowledge, is an advantage. This is why we can mark August 1, 2025, as a key milestone worthy of consideration.
With tariff deals continuing to be made, country-by-country and sector-by-sector, private markets investors are increasingly able to take stock of what is known and think about what could lie around the corner — however far down the road that may be. As we said in April, unknowns persist and the likelihood of a surprise or two along the way is high. So, we may need to adjust our pace once we reach the top of the next hill. Either way, answers to these questions can help formulate a better-informed plan of attack from our current position.
Volatility initially followed the April 2 US tariff announcements, with nearly half of institutional investors making tactical portfolio changes in response and many reallocating away from US equities. However, markets rebounded after the Trump Administration announced a tariff pause that was eventually extended to August 1. Moving into H2, sentiment in the US very recently moved from cautiously optimistic due to resilience in AI-related sectors and mega-cap tech to more solidly mixed. Concerns over jobs data, the possibility for continued inflation, and higher for longer interest rates in the second half of the year are variables the market is focusing on. In Europe and Asia, sentiment is more upbeat with growing confidence from investors that cycles are resetting.
Overall, the tariff and policy environment are not being ignored, they are being priced in gradually and unevenly. Markets are digesting them in stages by reacting to new information and adjusting expectations accordingly. This should continue as negotiations are ongoing, importantly for large economies like China and India whose deadlines have been pushed past August 1. Even agreements for countries whose deals have been announced are not final until they are signed and implemented. Given the tactical approach of the US administration and some disagreement over what has been agreed to, it is likely final arrangements will differ from the current state.
Looking forward, many expect a persistent drag on growth, especially in the US. Corporate profit margins are historically high, allowing companies to absorb some tariff cost pressures and cushioning the blow for markets. However, it will weigh on sentiment and earnings over time and trimming margins does have a limit where, once passed, costs will be passed on to the consumer. We should expect Trump will pay close attention to consumer pricing increases as he does not want to anger his base.
Markets should avoid a sharp correction due to US tariffs, though we did experience a blip on August 1 coming off of higher-than-expected inflation and a revised US jobs report. Where that issue lands after the firing of the Commissioner of Labor Statistics is to be determined and, perhaps more importantly, the debate over whether and when Trump dismisses the Fed Chair looms. The consensus is that Powell will make it through September, but nothing is guaranteed. While the situation isn’t apocalyptic, it’s also far from benign. The US administration’s sectoral and incremental approach has helped avoid worst-case outcomes so far, but the path forward remains uncertain, and further volatility is possible.
Despite elevated volatility since April 2, private markets showed incredible resilience in the first half of 2025. Global deal count and deal value continued to grow, outpacing the lulls experienced in recent years. However, the exuberance at the beginning of the year was dampened by the uncertainty across the global stage with a slow-down in deal activity across all regions in Q2 following the positive path set in Q1.
Though tariff-induced anxiety did cause stakeholders to wait for market clarity, H1 2025 exits (~$492 billion) have outpaced H1 2024 (~$387 billion). M&A activity remained resilient with total deal value reaching $2.0 trillion across 24,793 deals, a year-over-year increase of 13.6% for deal value and 16.2% for the number of transactions. Q2 did feel the tariff strain, with global deal value down 4.7% from Q1.1 That said, dealmakers forged ahead with US activity characterized by larger deals like Global Payments’ $24.3 billion acquisition of Worldpay2 and Europe buoyed by strong deal count.3
As global markets continue to absorb uncertainty from ongoing tariff negotiations and the resulting ramifications to supply chains and business models (which will continue beyond August 1), we anticipate both GPs and LPs will continue inching forward on a positive path and harnessing opportunities as they adjust across more insulated and top performing sectors. AI has continued to shine, with startups raising $104.3 billion in the U.S. in the first half of this year, nearly matching the $104.4 billion total for 2024.4 This was led by OpenAI’s $40B raise and Meta’s $14 billion investment in ScaleAI.
With tech tailwinds, global venture investment logged its strongest half-year since the first six months of 2022,5 signs of a potential recovery taking shape despite the more volatile backdrop. Secondaries reached a new record pace in H1 2025, with $102 billion in transaction volume and high-quality buyout portfolios generally trading at tight single-digit discounts. More than 70 continuation vehicles closed in the first half of the year, 6 providing GPs a strategic tool for boosting liquidity, returning capital to LPs, and strategically building momentum for future fundraising efforts for when markets gain greater clarity.
Our long-term investment approach continues to emphasize fundamental business and manager performance across economic cycles, supported by disciplined portfolio diversification and a large private markets dataset from which to derive insights. While we took tactical steps following Liberation Day including reassessing pending investments for tariff exposure, conducting a portfolio-wide review of potential impacts, and identifying dislocation-driven opportunities, our core evaluation process has remained intact. As trade negotiations evolve, we incorporate new developments into our investment evaluations, seeking to ensure each opportunity is assessed in light of the most current policy landscape.
Sector exposure plays a critical role in how tariffs affect private markets portfolios. HarbourVest’s allocations are weighted toward services-oriented sectors such as technology, business services, financial services, and healthcare, which have historically shown more resilience to trade-related disruptions. In contrast, sectors like consumer goods, manufacturing, and industrials — though a smaller portion of our portfolio — are more directly exposed to tariff pressures and global supply chain volatility. These differences underscore the importance of sector-aware portfolio construction and ongoing monitoring of macroeconomic developments.
In this environment, private markets investors must rely on rigorous due diligence and case-by-case evaluation to identify durable businesses capable of weathering uncertainty. Our focus on middle and lower-middle market companies, which are generally less reliant on global trade, provides some insulation from broader geopolitical risks. Even as we monitor the potential for a broader economic slowdown, we believe businesses will continue to invest in technology and operational efficiency, reinforcing the value of our long-term, fundamentals-driven strategy.
The elevated tariff regime under the Trump administration is not a temporary anomaly. It marks the beginning of a new normal in US trade policy. Tariff rates have reached levels not seen in nearly a century, and while some of the initial shock has been absorbed, the broader implications are still unfolding. The administration’s approach is highly personalized and bilateral, with country-by-country negotiations that often lack formal documentation, creating both flexibility and uncertainty. Deals like the one with Japan illustrate how informal arrangements can be revisited or reshaped, while countries like Korea are navigating sector-specific ambiguity due to delayed negotiations. The Brazil and Canada agreements, which include significant exemptions, show how tailored deals are shaping expectations and market reactions.
Legally, the situation remains fluid. The Court of International Trade struck down the IEEPA tariffs in May, and the case is now under appeal at the US Court of Appeals for the Federal Circuit, with a decision expected in late August or early September. A Supreme Court review could follow, but the practical impact of any ruling may be limited if bilateral agreements are finalized in the interim. The administration has positioned the tariffs as a one-time price adjustment, and while rates are currently landing in a range that markets can tolerate — generally around 15%, higher than hoped but lower than feared — there is still a seven-day window for further negotiation. The threat of tariffs in the hundreds of percents has receded, but this is not the end of the story.
Looking ahead, trade negotiations with countries not yet under agreement will continue, and revisions to USMCA are expected to begin in late 2025 or early 2026. Enforcement actions and transshipment crackdowns are likely post-midterms, as the administration builds capacity and political momentum. For private markets, this evolving landscape has already slowed deal flow and accelerated regionalization. Investors must remain vigilant, adjusting underwriting and portfolio strategies to reflect shifting trade dynamics. While the current environment is manageable, the risk of disruption remains, and the structure of future deals — especially with China — will be critical in shaping the next phase of this new normal.
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Private markets investing is a distance race, not a sprint, and there are many miles to go to reach the tariff finish line. The landscape remains fluid, shaped by varying sectoral impacts, evolving bilateral deals, and a legal framework that is still being tested. Ultimately, though, the August 1 checkpoint offers investors a chance to recalibrate with a clearer sense of the course ahead.
While surprises are inevitable, the tools to respond — data-driven insights, sector awareness, and investment discipline — are already in hand. With thoughtful due diligence and a commitment to diversification, investors can navigate this terrain with increased confidence. The ability to evaluate opportunities on a case-by-case basis, factoring in both macro risks and micro fundamentals, will be key to identifying resilient businesses and generating sustainable returns.
The race continues and with each mile marker the path forward becomes more defined.
HarbourVest Partners, LLC (“HarbourVest”) is a registered investment adviser under the Investment Advisers Act of 1940. This material is solely for informational purposes; the information should not be viewed as a current or past recommendation or an offer to sell or the solicitation to buy securities or adopt any investment strategy. In addition, the information contained in this document (i) may not be relied upon by any current or prospective investor and (ii) has not been prepared for marketing purposes. In all cases, interested parties should conduct their own investigation and analysis of the any information set forth herein and consult with their own advisors. HarbourVest has not acted in any investment advisory, brokerage or similar capacity by virtue of supplying this information. The opinions expressed herein represent the current, good faith views of the author(s) at the time of publication, are not definitive investment advice, and should not be relied upon as such. This material has been developed internally and/or obtained from sources believed to be reliable; however, HarbourVest does not guarantee the accuracy, adequacy or completeness of such information. The information is subject to change without notice and HarbourVest has no obligation to update you. There is no assurance that any events or projections will occur, and outcomes may be significantly different than the opinions shown here. This information, including any projections concerning financial market performance, is based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons. The information contained herein must be kept strictly confidential and may not be reproduced or redistributed in any format without the express written approval of HarbourVest.
“Professional Investor” under the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) (the “SFO”) and its subsidiary legislation) means:
(a) any recognised exchange company, recognised clearing house, recognised exchange controller or recognised investor compensation company, or any person authorised to provide automated trading services under section 95(2) of the SFO;
(b) any intermediary, or any other person carrying on the business of the provision of investment services and regulated under the law of any place outside Hong Kong;
(c) any authorized financial institution, or any bank which is not an authorised financial institution but is regulated under the law of any place outside Hong Kong;
(d) any insurer authorized under the Insurance Ordinance (Cap. 41 of the Laws of Hong Kong), or any other person carrying on insurance business and regulated under the law of any place outside Hong Kong;
(e) any scheme which-
(i) is a collective investment scheme authorised under section 104 of the SFO; or
(ii) is similarly constituted under the law of any place outside Hong Kong and, if it is regulated under the law of such place, is permitted to be operated under the law of such place,
or any person by whom any such scheme is operated;
(f) any registered scheme as defined in section 2(1) of the Mandatory Provident Fund Schemes Ordinance (Cap. 485 of the Laws of Hong Kong), or its constituent fund as defined in section 2 of the Mandatory Provident Fund Schemes (General) Regulation (Cap. 485A of the Laws of Hong Kong), or any person who, in relation to any such registered scheme, is an approved trustee or service provider as defined in section 2(1) of that Ordinance or who is an investment manager of any such registered scheme or constituent fund;
(g) any scheme which-
(i) is a registered scheme as defined in section 2(1) of the Occupational Retirement Schemes Ordinance (Cap. 426 of the Laws of Hong Kong); or
(ii) is an offshore scheme as defined in section 2(1) of that Ordinance and, if it is regulated under the law of the place in which it is domiciled, is permitted to be operated under the law of such place,
or any person who, in relation to any such scheme, is an administrator as defined in section 2(1) of that Ordinance;
(h) any government (other than a municipal government authority), any institution which performs the functions of a central bank, or any multilateral agency;
(i) except for the purposes of Schedule 5 to the SFO, any corporation which is-
(i) a wholly owned subsidiary of-
(A) an intermediary, or any other person carrying on the business of the provision of investment services and regulated under the law of any place outside Hong Kong; or
(B) an authorized financial institution, or any bank which is not an authorised financial institution but is regulated under the law of any place outside Hong Kong;
(ii) a holding company which holds all the issued share capital of-
(A) an intermediary, or any other person carrying on the business of the provision of investment services and regulated under the law of any place outside Hong Kong; or
(B) an authorized financial institution, or any bank which is not an authorised financial institution but is regulated under the law of any place outside Hong Kong; or
(iii) any other wholly owned subsidiary of a holding company referred to in subparagraph (ii); or
(j) any person of a class which is prescribed by rules made under section 397 of the SFO for the purposes of this paragraph as within the meaning of this definition for the purposes of the provisions of the SFO, or to the extent that it is prescribed by rules so made as within the meaning of this definition for the purposes of any provision of the SFO.
The first of such classes of additional “professional investor”, under the Securities and Futures (Professional Investor) Rules (Cap. 571D of the Laws of Hong Kong), are:
(k) any trust corporation (registered under Part VIII of the Trustee Ordinance (Cap. 29 of the Laws of Hong Kong) or the equivalent overseas) having been entrusted under the trust or trusts of which it acts as a trustee with total assets of not less than HK$40 million or its equivalent in any foreign currency at the relevant date (see below) or-
(i) as stated in the most recent audited financial statement prepared-
(A) in respect of the trust corporation; and
(B) within 16 months before the relevant date;
(ii) as ascertained by referring to one or more audited financial statements, each being the most recent audited financial statement, prepared-
(A) in respect of the trust or any of the trust; and
(B) within 16 months before the relevant date; or
(iii) as ascertained by referring to one or more custodian (see below) statements issued to the trust corporation-
(A) in respect of the trust or any of the trusts; and
(B) within 12 months before the relevant date;
(l) any individual, either alone or with any of his associates (the spouse or any child) on a joint account, having a portfolio (see below) of not less than HK$8 million or its equivalent in any foreign currency at the relevant date or-
(i) as stated in a certificate issued by an auditor or a certified public accountant of the individual within 12 months before the relevant date; or
(ii) as ascertained by referring to one or more custodian statements issued to the individual (either alone or with the associate) within 12 months before the relevant date;
(m) any corporation or partnership having-
(i) a portfolio of not less than HK$8 million or its equivalent in any foreign currency; or
(ii) total assets of not less than HK$40 million or its equivalent in any foreign currency, at the relevant date, or as ascertained by referring to-
(iii) the most recent audited financial statement prepared-
(A) in respect of the corporation or partnership (as the case may be); and
(B) within 16 months before the relevant date; or
(iv) one or more custodian statements issued to the corporation or partnership (as the case may be) within 12 months before the relevant date; and
(n) any corporation the sole business of which is to hold investments and which at the relevant date is wholly owned by any one or more of the following persons-
(i) a trust corporation that falls within the description in paragraph (k);
(ii) an individual who, either alone or with any of his or her associates on a joint account, falls within the description in paragraph (k);
(iii) a corporation that falls within the description in paragraph (m);
(iv) a partnership that falls within the description in paragraph (m).
For the purposes of paragraphs (k) to (n) above:
An institutional investor as defined in Section 4A of the SFA and Securities and Futures (Classes of Investors) Regulations 2018 is:
(a) the Singapore Government;
(b) a statutory board as may be prescribed by regulations made under section 341 of the SFA, as prescribed in the Second Schedule of the Securities and Futures (Classes of Investors) Regulations 2018;
(c) an entity that is wholly and beneficially owned, whether directly or indirectly, by a central government of a country and whose principal activity is —
(i) to manage its own funds;
(ii) to manage the funds of the central government of that country (which may include the reserves of that central government and any pension or provident fund of that country); or
(iii) to manage the funds (which may include the reserves of that central government and any pension or provident fund of that country) of another entity that is wholly and beneficially owned, whether directly or indirectly, by the central government of that country;
(d) any entity —
(i) that is wholly and beneficially owned, whether directly or indirectly, by the central government of a country; and
(ii) whose funds are managed by an entity mentioned in sub‑paragraph (c);
(e) a bank that is licensed under the Banking Act 1970;
(f) a merchant bank that is licensed under the Banking Act 1970;
(g) a finance company that is licensed under the Finance Companies Act 1967;
(h) a company or co‑operative society that is licensed under the Insurance Act 1966 to carry on insurance business in Singapore;
(i) a company licensed under the Trust Companies Act 2005;
(j) a holder of a capital markets services licence;
(k) an approved exchange;
(l) a recognised market operator;
(m) an approved clearing house;
(n) a recognised clearing house;
(o) a licensed trade repository;
(p) a licensed foreign trade repository;
(q) an approved holding company;
(r) a Depository as defined in section 81SF of the SFA;
(s) a pension fund, or collective investment scheme, whether constituted in Singapore or elsewhere;
(t) a person (other than an individual) who carries on the business of dealing in bonds with accredited investors or expert investors;
(u) a designated market‑maker as defined in paragraph 1 of the Second Schedule to the Securities and Futures (Licensing and Conduct of Business) Regulations;
(v) a headquarters company or Finance and Treasury Centre which carries on a class of business involving fund management, where such business has been approved as a qualifying service in relation to that headquarters company or Finance and Treasury Centre under section 43D(2)(a) or 43E(2)(a) of the Income Tax Act 1947;
(w) a person who undertakes fund management activity (whether in Singapore or elsewhere) on behalf of not more than 30 qualified investors;
(x) a Service Company (as defined in regulation 2 of the Insurance (Lloyd’s Asia Scheme) Regulations) which carries on business as an agent of a member of Lloyd’s;
(y) a corporation the entire share capital of which is owned by an institutional investor or by persons all of whom are institutional investors;
(z) a partnership (other than a limited liability partnership within the meaning of the Limited Liability Partnerships Act 2005) in which each partner is an institutional investor.
An accredited investor as defined in Section 4A of the SFA and Securities and Futures (Classes of Investors) Regulations 2018 is:
(i) an individual —
(A) whose net personal assets exceed in value $2 million (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount;
(B) whose financial assets (net of any related liabilities) exceed in value $1 million (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount, where “financial asset” means —
(BA) a deposit as defined in section 4B of the Banking Act 1970;
(BB) an investment product as defined in section 2(1) of the Financial Advisers Act 2001; or
(BC) any other asset as may be prescribed by regulations made under section 341; or
(C) whose income in the preceding 12 months is not less than $300,000 (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount;
(ii) a corporation with net assets exceeding $10 million in value (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe, in place of the first amount, as determined by —
(A) the most recent audited balance sheet of the corporation; or
(B) where the corporation is not required to prepare audited accounts regularly, a balance sheet of the corporation certified by the corporation as giving a true and fair view of the state of affairs of the corporation as of the date of the balance sheet, which date must be within the preceding 12 months;
(iii) A trustee of a trust which all the beneficiaries are accredited investors; or
(iv) A trustee of a trust which the subject matter exceeds S$10 million; or
(v) An entity (other than a corporation) with net assets exceeding S$10 million (or its equivalent in a foreign currency) in value. “Entity” includes an unincorporated association, a partnership and the government of any state, but does not include a trust; or
(vi) A partnership (other than a limited liability partnership) in which every partner is an accredited investor; or
(vii) A corporation which the entire share capital is owned by one or more persons, all of whom are accredited investors.
Continuation solutions encompass a host of transaction types in which a GP secures interim liquidity and/or additional primary capital for their LPs in a strongly performing asset, or set of assets, that the GP will continue to own and control. Specifically, they include continuation funds, new funds created by GPs for the purpose of acquiring the asset(s) that continue to be managed by the same GP and capitalized by one or several secondary buyers, or equity recapitalizations involving a direct equity or structured equity investment into a portfolio company. These transactions can also include a parallel investment from the GP’s latest fund into that same pool of assets (a “cross-fund trade”).
