Private Equity Insights

Private Thoughts From My Desk ……………. #33 𝐓𝐚𝐫𝐢𝐟𝐟𝐬 & 𝐔𝐧𝐜𝐞𝐫𝐭𝐚𝐢𝐧𝐭𝐲: 𝐖𝐡𝐚𝐭 𝐈𝐭 𝐌𝐞𝐚𝐧𝐬 𝐟𝐨𝐫 𝐏𝐄 𝐑𝐢𝐠𝐡𝐭 𝐍𝐨𝐰 After five years of what I can only describe as "unique disruptions"—a global pandemic, unprecedented inflation, interest rate shocks—we now face yet another: a new wave of tariffs. For private equity, the impact of these policy moves isn’t just about the numbers—it’s about the uncertainty they inject into long-term models. Private equity lives and dies by its ability to predict the future—five years at a time, with leverage. So when policy shifts like these arrive without clear direction or a timeline, deal pipelines stall. It’s not that the tariffs themselves are necessarily fatal—it’s that no one knows what game we’re playing, or how the rules might change again next quarter. We entered 2025 with momentum. Intermediaries were busy, due diligence was in high gear, portfolio companies were readying for exit. But in February, the “T word” started surfacing. Tariffs are just another word for uncertainty—what I call the dreaded “U word” in private equity—and everything slowed. Activity now reflects what we’re hearing every day: it’s hard to make long-term bets when you don’t know what to model in the short term. For LPs, the liquidity crunch is especially acute. Liquidity is at levels we haven’t seen since the Great Recession. Many LPs are rebalancing through secondaries; some are exploring NAV loans and other creative strategies. The ones with dry powder—sovereign wealth funds, select family offices—see dislocation as opportunity. But for most, frustration is mounting. Fundraising is feeling the pinch, see the chart below for buyout fundraising trends. Exit activity is a leading indicator—and right now, that indicator is flashing yellow. Fundraising was always going to be challenged in 2025. Now, recovery may be deferred even further. So what can GPs do? It’s back to basics (again) with portfolio companies: secure the balance sheet, conserve cash, and avoid covenant or financing issues in the near term. There’s also renewed urgency to get EBITDA up—quickly—through pricing, cost reduction, and working capital optimization. Anything that opens the door to a liquidity event in the near term. This is also a time for firms to solidify their long-term strategy. Some are asking whether it’s time to double down on what they do best and exit non-core strategies. Consolidation is no longer theoretical—it’s a daily conversation, especially for firms caught in the increasingly challenging middle market. This isn’t a crisis. But it is a moment of reckoning. In a market defined by scarcer capital, talent, and investment opportunities—not everyone wins. Knowing what you do best, doubling down on it, and charting a clear path forward for your firm are more essential than ever. #privateequity #privatemarkets #privatethoughtsfrommydesk

I’m hearing a lot of questions from clients about how America is in motion, and how the new administration’s policies might shape the M&A market. And after a couple of slow years, dealmakers are ready to get back to the negotiating table. There are some reasons to be optimistic about the year ahead for M&A. Here is what we’re watching: ✅ Biden administration officials often pushed back on large deals in court. They didn’t always win, but the uncertainty likely slowed M&A activity. With new leadership at the DOJ and FTC, we expect a more permissive approach. This could open the door for larger transactions.  ✅ President Trump’s reassessment of Biden-era rules could also help clear some barriers that were keeping some dealmakers on the sidelines.  ✅ Higher borrowing costs over the last two years dampened earnings and cash flow for many companies. Some of them may look to be acquired as a way to avoid bankruptcy court. Rates have already dropped from a year ago and, while the Fed will likely stick to its current wait-and-see approach in the near term, even modest interest rate reductions could improve the ROI on new deals.  ✅ A likely deregulatory environment—combined with what looks like a soft landing for the economy—could create a much-needed opening for private equity firms looking to exit long-held investments. There also are reasons for caution. The Republican coalition can sometimes be skeptical of dealmaking, especially regarding Big Tech or M&A with a national security implication. The markets are trying to digest so many tariff updates coming out of the administration. Tariffs and immigration restrictions also could add inflationary pressures or hurt growth. We’re keeping a close eye on those factors—and dealmakers should too. Read more: https://lnkd.in/e8KA2qbt 

🔴 CFOs, are you the PE Firm’s Secret Weapon? Here’s the truth: A CFO who knows more than the CEO about the business isn’t just valuable — they’re irreplaceable. I’m talking about the CFO who sees the whole chessboard: - Financials — what’s buried in the numbers no one else notices. - Operations — they know where inefficiencies are dragging down profit. - People — they can tell you who the real MVPs are, and who’s coasting. - Customers — they know which ones are making the company money, and which are just noise. - Competitors — they see the moves being made before they’re on the radar. - Private Equity Expectations — they know the growth playbook, the exit strategy, and how to hit investor targets. - Technology & Innovation — they understand what’s hype vs. what actually drives ROI and competitive advantage. - Culture & Leadership — they shape the company’s DNA and drive execution through people. When a CFO understands all this, they’re not just a finance leader—they’re the PE firm’s secret weapon. A CFO doesn’t just protect EBITDA. A great CFO engineers a company that scales, executes, and exits at the highest possible valuation. CFO as the architect of long-term value creation. 🔹 They don’t just fix problems—they engineer winning playbooks. 🔹 They shape the investment thesis by driving profitable growth. Here’s a Real Example: Private equity firm buys a company. Big plans. High expectations. The CEO is focused on growth—expansion, acquisitions, new markets. The PE firm wants results—EBITDA growth, cost synergies, and a clear exit path. The CFO? They’re the only one who sees both sides of the game. One deal nearly went through—looked perfect on paper. Revenue upside. Expansion potential. Everyone’s excited. CFO digs in. Finds the issue. The target company’s margins are inflated. Hidden churn problem. Too many one time revenue events that masked issues. Cost to serve was 3x higher than anyone realized. If the deal had closed, the PE firm would have overpaid massively. That’s the difference between a CFO who knows just the numbers and a CFO who knows the whole business, the PE strategy, and the investor mindset. This is the CFO who: - Sees the future—and not just the rosy one. - Makes the hard calls—even when the CEO is charging full steam ahead. - Connects the dots—before anyone else realizes there’s a problem. - Delivers for PE investors—not just through reporting, but by steering the entire investment toward a successful exit. They’re not the ones with the spotlight, but they’re the ones making sure the company scales, wins, and exits strong. CEOs—find this CFO. PE Firms—bet on this CFO. CFOs—be this person. ♻️ Tag a CFO who’s already playing this game at a high level. 💬 CFOs—when’s the last time you saw something no one else did? Drop your story in the comments

50% of CEOs in PE-Backed FMCG Companies Don’t Last 2 Years. I’ve seen it happen too many times—a seasoned FMCG executive, a proven leader, steps into a private equity-backed company, and within 18-24 months, they’re out. Not because they weren’t talented, but because PE leadership is a different game. McKinsey & Company reports that nearly 50% of CEOs hired post-acquisition don’t survive beyond two years. That’s a brutal statistic, and it begs the question—why do so many leaders fail? Why? Because leading in a PE-backed company is NOT the same as leading a legacy brand. It’s like going from running a marathon to running a sprint while juggling knives. 1.Speed Over Stability – PE firms don’t do "slow and steady." They want results, fast. 2. Relentless EBITDA Focus – You’re not just leading a brand, you’re a human ROI machine. 3. Operators Win, Not Theorists – No time for “big-picture” dreaming. Execution is everything. Who Actually Succeeds in This Game? ✅ Leaders with M&A experience – They know how to integrate, restructure, and drive immediate ROI. ✅ Execs who THRIVE under pressure – The ones who don’t break when investors demand growth yesterday. Who Doesn’t Make It? ❌ The CEO who thinks this is just another corporate gig—it’s not. ❌ The leader who wants to build a long-term legacy—PE firms want an efficient, profitable exit. ❌ The executive who struggles to move at breakneck speed—PE-backed firms demand rapid decision-making and execution. I’ve seen amazing FMCG leaders burn out in PE-backed roles because they weren’t prepared for the intensity. But I’ve also seen absolute rockstars come in, slash inefficiencies, scale smartly, and deliver massive value before the next exit. Hiring for a PE-backed company isn’t just about finding an exceptional leader—it’s about finding one who understands this environment and can thrive in it. The best PE-backed CEOs don’t just survive—they create exponential value and drive an exit strategy from Day 1. If you’re hiring for a PE-backed FMCG brand, the wrong hire can cost millions. But the right one? They’ll scale, execute, and deliver record-breaking ROI. 📩 Let’s talk about how to find the executive who will thrive in your deal, not just survive it. #PrivateEquity #FMCGLeadership #ExecutiveSearch #MergersAndAcquisitions #Leadership

Private equity appears to be back on a growth path, but the game has changed. Having worked closely with private equity clients, I’ve seen how firms must adapt to stay ahead. A few takeaways from Bain’s latest Global Private Equity Report:   1️⃣ Top-quartile firms are pulling away. The best GPs grew fund sizes by 53% last year. A clear strategy and liquidity plan are now table stakes. 2️⃣ Financial engineering alone won’t cut it. The winners drive real value—AI, operational transformation, sector expertise. 3️⃣ Exits remain the biggest hurdle. With $3.6T in unrealized value, creative liquidity solutions are no longer optional. I’ve seen this industry reinvent itself before. The firms that create value, not just wait for multiples to expand will define the next decade. Read the full report here: https://lnkd.in/gRMyCdjb

Knowledge is power. Churchill Asset Management's long-term relationships with private equity firms – and role as an LP in many of their funds – afford us tremendous knowledge about deals and the overall outlook for the PE market.   This essential data helps us make well-informed decisions to best serve our investors in the short and long term. In May, we surveyed over 160 senior leaders from our middle market private equity relationships to understand how they're viewing today's market environment and how their perspectives are shaping current investment strategies.   The findings:   ✅ Over half of PE leaders expect normalized M&A activity in the first half of 2026 – with a quarter anticipating normalization before the end of 2025.   ✅ Relationships, speed & certainty are the top priorities for GPs when selecting a financing partner.   ✅ Tariff and political uncertainty is driving GPs toward industries like business services, utilities, financial services & technology – and away from the consumer goods and auto sectors.   These learnings are incredibly helpful as we finance PE sponsored core middle market companies and seek to deliver the best possible returns to our investors. They also affirm our strategies: leaning into the power of relationships, and toward non-cyclical, service-based sectors in the core middle market.

Invest in Health Healthcare represents a compelling investment opportunity for private equity & credit managers alike. While PE faces headwinds across a range of cyclical sectors, healthcare demonstrates unique resilience and growth characteristics with favorable tailwinds. Managers like Marathon Asset Management with a dedicated healthcare investment team have seen robust deal flow as a few key structural advantages differentiate healthcare from other industry sectors. A Strategic & Rewarding Investment Focus for Private Equity & Private Credit in Healthcare since: - inelastic demand from aging demographics - non-cyclical stable revenue streams - less susceptible to import pressure particularly in healthcare services - roll-up opportunities in this highly fragmented industry - greater relative exit optionality given strategic buyer demand and acceptance from IPO market Dedicated Healthcare PE funds have grown from 2.5% to 5.1% of the overall PE market during the last decade as can be seen in the chart below, demonstrating institutional recognition of healthcare's attractive risk-adjusted returns and consistent performance across market cycles. Significant deal flow has also come from Europe in Healthcare, undoubtably this year’s most active sector in the private markets, y-t-d. Europe spends 11% of GDP on healthcare, the U.S. spends 17%. GDP is growing and healthcare cost are increasing in lockstep. Health and Wealth go together in life and with investing. Exciting times, never been busier.

The AI revolution is here, but many organizations are still struggling to turn potential into profit. The question remains: How do we achieve measurable value, and quickly? The latest insights from Harvard Business Review reveal how private equity firms are paving the way with strategic AI implementation:  - Leadership alignment: Secure buy-in at both the PE firm and portfolio companies to drive momentum.  - Talent acquisition: Hire data scientists or leverage outside consultants with business know-how to build and deploy solutions at scale.  - Data discipline: Prioritize data quality before scaling AI.  - Targeted use cases: Focus on practical applications that create transferable value to a future buyer.    Structured diligence: Assess AI’s impact early in the investment process.    The private company formula of strategic focus and disciplined execution can act as a guide for organizations turning AI potential into measurable results.     https://lnkd.in/gpNG_2-7 

71% of exit dollars in 2024 came from a new avenue : secondaries. Historically, IPOs and M&A have been the dominant exit paths for venture backed companies. Some years IPOs dominate, other M&A dominates, but in 2024 secondaries captured the super majority. When a company sells new shares to investors in exchange for dollars, they create new shares in the company - primary shares. When existing shareholders sell their shares to new investors, we call this a secondary sale. An employee tender is a secondary sale offered to employees of the company. But secondary sales can also occur between one venture capitalist and another venture capitalist. The secondaries market is incredibly opaque. So the figures gathered here are extremely rough estimates but should be directionally correct. There has been a huge challenge in liquidity since 2022 with the IPO market effectively silent, and M&A also stymied. In response, capital markets respond in a way they always do. They flood capital where there’s opportunity. And now the primary path to liquidity within venture are secondaries. This is based on a Pitchbook analysis of the overall secondary market released in Q1 of 2025. This mirrors the private equity industry. I’ve written previously about how venture capital and private equity have parallel paths. Here I’m using a slightly different and narrower dataset, but you can see the announced transactions that have been reported that are outside the scope of private exchanges are roughly 20 to 30% within both private equity and venture capital. Over the last 10 years private equity has averaged about 28% secondaries as a form of liquidity. As in private equity, we should start to expect secondaries to become a permanent and significant part of venture capital liquidity for both employees of companies and also investors. With the target ARR required to achieve an IPO growing from $80m in 2008 to approximately $250m today, secondaries will become a permanent fixture in venture capital markets. It’s not just a temporary anomaly, but a structural evolution in how venture capital will function and ultimately evolve to look a bit more like private equity.

The private markets reset is here and it’s getting more competitive. The fog is clearing and there is a power reshuffle across the ecosystem: 💥 𝗖𝗮𝗽𝗶𝘁𝗮𝗹 𝗶𝘀 𝗺𝗼𝘃𝗶𝗻𝗴 𝗱𝗶𝗳𝗳𝗲𝗿𝗲𝗻𝘁𝗹𝘆  • LPs are no longer just passive. They’re building liquidity through secondaries and buying stakes in GPs themselves.  • Fundraising? Still tough. But smart midmarket players are thriving while mega-funds stall.  • Retail and high-net-worth investors are quietly fueling new AUM channels via evergreen and semi-liquid structures. 📉 𝗧𝗵𝗲 𝗼𝗹𝗱 𝗽𝗹𝗮𝘆𝗯𝗼𝗼𝗸𝘀 𝗮𝗿𝗲 𝗯𝗿𝗲𝗮𝗸𝗶𝗻𝗴  • Financial engineering alone isn’t enough. Exit backlogs are worse than they've been in two decades.  • IRR isn't the only metric anymore MOIC and real distributions matter more than modeled upside. 🚀 𝗪𝗵𝗮𝘁’𝘀 𝘄𝗼𝗿𝗸𝗶𝗻𝗴 𝗻𝗼𝘄  • Deals over $500M are surging. Sponsors are writing bigger checks with more conviction.  • Operators are doubling down on real value creation with AI-enabled ops, cash generation, and exit prep that starts years in advance.  • Public-to-private is back. Expect even more as sponsors look for undervalued public gems. 🧠 𝗪𝗵𝗮𝘁’𝘀 𝗻𝗲𝘅𝘁?  • Expect more verticalized GP platforms, continuation vehicles, and cross-border carveouts.  • Watch for Asia's rebound (post-China retrenchment), and the continued rise of AI in fund ops.  • And if IPOs remain frozen, expect long-term corporate acquirers to gain leverage.  • 2025 isn’t about waiting for better conditions. It’s about proving you can win in these conditions. #PrivateMarkets #PrivateEquity #Fundraising #Secondaries #LPstrategy #OperationalExcellence #GPstakes #VentureCapital #AIinFinance #NextGenPE