In recent years, the role of capital markets in providing non bank financing and supporting productive economic activities has expanded, particularly in developing economies. Among modern financial instruments, private equity funds possess substantial potential to support unlisted companies and contribute to economic growth. Nevertheless, the performance and development of private equity funds in Iran have remained significantly below the potential capacity of the country’s capital market, largely due to structural, institutional, and operational constraints.

This study aims to examine the underlying challenges facing private equity funds in Iran and to propose practical solutions to enhance their effectiveness and development. The research data were collected through semi structured interviews with ten capital market experts and managers actively engaged in the private equity industry. The collected data were analyzed using thematic analysis, through which 108 key insights were identified. These insights were subsequently conceptualized into 74 basic themes and one overarching theme. The findings suggest that regulatory reforms, strengthening human and institutional capabilities, promoting greater awareness and market culture, and developing effective exit market infrastructures can significantly facilitate the growth and expansion of private equity funds in Iran.