By Ateev Bhandari and Pritam Biswas

May 22 (Reuters) - Private equity firm GTCR is set to return more than $5 billion to its investors in the calendar year, a source familiar with the matter told Reuters on Thursday, after a string of strong exits sealed a positive momentum for the firm.

The development is bucking the trend, as private market investors continue to face a liquidity crunch, driven by persistently high interest rates, macroeconomic volatility and rising odds of a U.S. recession.

GTCR's sale of Worldpay last month netted the firm a return two times its investment, the source added, with the $24.25 billion three-way deal helping to lift an otherwise moribund start to the year.

In an environment where private equity firms have been compelled to hold onto their investments for longer periods, GTCR has been actively divesting its stakes.

Earlier this week, Reuters reported, citing a source, that GTCR sold insurtech itel for over $1.3 billion. This followed its late 2024 sale of insurance brokerage Assured Partners to Arthur J. Gallagher AJG.N for $13.45 billion.

GTCR declined to a Reuters' request for comment.

Expectations of a dealmaking resurgence in 2025 have morphed into policy paralysis in recent months, as bankers advise clients to hold off on mergers and acquisitions and initial public offerings until there is more clarity and consistency on U.S. policy.

M&As in April have almost fallen to their lowest level in more than 20 years, leaving investors in private markets, who lock up capital at a higher risk expecting higher returns, pressuring their money managers for distributions.

Many prolific investors, including Harvard and Yale University, have been reducing their private equity positions as capital calls from commitments to other funds have outpaced returns from such investments.

Bloomberg was the first to report on GTCR's returns.

(Reporting by Ateev Bhandari and Pritam Biswas in Bengaluru; Editing by Vijay Kishore)

((Pritam.Biswas@thomsonreuters.com;))