Industry Recognition
Evalueserve has been named Research Solution of the Year at the Private Equity Wire US Awards 2025, highlighting its leadership in private markets and AI-enabled solutions. The awards, held in New York, recognize excellence among fund managers and service providers. Evalueserve's Global Leader of Private Markets Advisory Solutions, Deepesh Bhatnagar said “this award reflects what our clients experience when rigorous research is amplified by modern technology.” Evalueserve continues to focus on strategic growth by embedding AI and automation to improve decision-making and streamline operations for clients. For more details, read the full press release here.
Market Opportunities/Challenges
Transforming value creation in private equity
Private equity is evolving from traditional strategies of financial engineering and market timing to a more structured, data-driven approach to create value. The industry faces challenges such as normalized interest rates, persistent inflation, geopolitical volatility, and rapid technological change, which have rendered old levers like financial leverage and multiple expansion less effective. Fundraising has slowed, exits have decelerated, and median holding periods now exceed six years, putting pressure on PE firms to find new value creation methods. Continuation funds offer temporary relief but do not solve the liquidity challenge, while macroeconomic instability and deglobalization push capital towards localization.
Recent surveys indicate that PE is at an inflection point, with a growing emphasis on structured, professionalized value creation approaches. Data plays a crucial role in identifying value opportunities early in the deal cycle and implementing transformation initiatives. Traditional strategies like aggressive cost-cutting and geographical expansion are losing their effectiveness, and geopolitical instability is fragmenting supply chains. To deliver operational alpha, PE firms must adapt their playbooks, investing in operational AI, advanced analytics, and data-driven decision-making.
Institutionalizing operational alpha is now essential for PE firms to outperform traditional stock pickers and attract new capital. This involves scenario simulation, outside-in intelligence, predictive analytics, proprietary data, and functional operating models. Refer to the full report here.
Source: KPMG
Unlocking Value: Staging techniques for portfolio company exits
With over US$1.6 trillion in portfolio company (PortCo) assets held for four years or more, PE firms are focused on returning capital to investors. However, buyer expectations for value creation have increased, and deal multiples have declined, necessitating PE firms to demonstrate how they've enhanced PortCo value during the hold period. The average holding period has increased by 26% in the past five years, creating a backlog of assets ready for exit.
PE firms must adopt a value creation-driven approach to exits, integrating value optimization strategies with tactical value delivery initiatives, known as structured exit value optimization (EVO). EVO combines strategic narrative building, thorough preparation, and buyer-centric positioning, grounded in factual growth and value realization. Firms that prepare assets for sale early and present compelling EVO narratives can attract top dollar offers.
The EY Private Equity Exit Readiness Study 2025 surveyed 100 PE professionals from firms in the Americas and EMEIA, revealing critical gaps in exit planning. Key findings include:
• 93% of firms report exit preparation initiatives improved exit valuations.
• 88% aim to exit assets within one to two years.
• 65% find capturing value creation initiatives in exit EBITDA challenging.
• 72% report robust data and KPIs as major finance function issues.
• 66% would focus on better management preparation for future exits.
PE firms prioritize capturing value creation in EBITDA, data readiness, and management preparation to improve exits. Exit value optimization can significantly impact exit outcomes, making the difference between expected and exceptional results.
Source: EY
Navigating new frontiers: Private markets in 2026
Aggregate transaction statistics indicate elevated holding values with significant dispersion across sectors. Some assets are overvalued and may require markdowns for sale, while others are fairly valued. General partners are willing to accept discounts to sell long-held assets. Valuations relative to EBITDA are elevated compared to historical levels. The 2021-early 2022 cohort faces challenges due to peak valuations and a tough operating environment, while the 2018-2020 cohort is positioned for attractive returns. Meticulous asset selection is crucial in an environment with greater returns dispersion. Manager alpha is emphasized as a critical dimension of portfolio construction. The investor universe has rationalized, especially in later investment stages, amid a challenging fundraising environment. A shift from "growth-at-all-costs" to profitable growth is noted, with opportunities for investors with dry powder to invest in category-leading companies. Critical success factors include sourcing attractive companies, disciplined investment pacing, and operating expertise. Credit secondaries and mezzanine financing are highlighted as new avenues for liquidity and demand. The office sector remains under strain, with significant distressed assets, but prime assets are seeing increased transaction activity. The circular economy and transportation/logistics sectors are undergoing transformation, with significant demand for capital solutions.
Source: Goldman Sachs Asset Management
Infrastructure debt: A compelling private credit portfolio addition
The infrastructure debt is a growing investment opportunity. McKinsey has identified a need for US$106 trillion in infrastructure investment by 2040. Infrastructure debt offers enhanced risk-adjusted returns, strong performance through credit cycles, and structural protections that mitigate risk compared to other high-yield credit alternatives. It features lower default and loss rates than similarly rated corporate debt due to structural protections, collateral, and liquidity requirements, and lower correlation to GDP-linked asset classes like equities and corporate debt. Infrastructure debt provides exposure to sectors such as power and energy, digital, and transportation, supported by economic trends. Non-bank lending to infrastructure has grown significantly, with non-bank lenders comprising 53% of private debt provided to infrastructure projects in 1H2025. Infrastructure assets are defined as physical assets or systems providing essential services with limited competition and high barriers to entry. Infrastructure assets are broadly organized into six major sectors and groups investment strategies into four categories: Core, Core-Plus, Value-Added, and Opportunistic. Key attributes of private high-yield infrastructure debt include enhanced cash returns, lower credit risk, enhanced structural protections, and diversification. In 2025, private high-yield BB infrastructure credit spreads offered yields of approximately 7.00% or higher. Infrastructure debt has demonstrated lower default rates and higher recovery rates compared to non-financial corporate debt.
Source: MetLife Investment Management
ESG Trends
Private markets’ quiet progress on decarbonization
Recent months have seen a shift in momentum on sustainability, with net-zero alliances scaled back and major banks delaying decarbonization targets. Despite this, Bain research reveals real momentum in private markets. A global survey of general partners (GPs) and limited partners (LPs) shows that decarbonization is increasingly factored into due diligence and investment decisions, with 70% of GPs viewing it as a long-term value creator. The Private Markets Decarbonization Roadmap (PMDR) framework is widely adopted to track progress, with firms like Kohlberg using it to help portfolio companies capture value-accretive opportunities. 97% of GPs measure Scope 1 and Scope 2 emissions, and 84% measure Scope 1, Scope 2, and Scope 3 emissions. However, many investors struggle with measuring carbon-intensity changes and setting decarbonization targets. Decarbonization can create long-term value, with 25% of global industrial emissions abatable with positive ROI, and an additional 32% potentially ROI-positive within the next decade. Success stories show that consistent measurement and shared accountability are crucial, with PMDR providing a common language and structure for tracking progress. The framework is rapidly adopted, with high satisfaction among users. Private markets are maturing in their approach to decarbonization, with 28% of GPs making net-zero commitments and 75% on track to meet them. To accelerate progress, investors should treat decarbonization as a creator of economic value, engage early on climate expectations, and iteratively improve through proactive data sharing. Private markets are moving towards tangible execution and measurable outcomes, transforming carbon reduction into a competitive advantage.
Source: Bain & Company
Artificial Intelligence Scope/Trends
The role of AI in revolutionizing private equity value creation
The use of AI in the PE sector extends beyond process automation, requiring purposeful integration and development to achieve sustainable efficiency, better investment decisions, and strong positioning against limited partners (LPs). Strategic anchoring is essential to unlock AI's full potential, leveraging the interplay of technology, organization, and competence for competitive advantage.
AI's strategic impact in portfolio companies is significant, transforming central functions such as finance, HR, procurement and supply chain, legal and compliance, customer support, and IT. Automated analyses in finance improve planning and reporting, AI-driven tools in HR accelerate recruiting, data-driven models in procurement enhance efficiency, contract analytics in legal automate routine tasks, intelligent automation in customer support reduces costs, and AI solutions in IT bolster harmonization and cybersecurity. Pioneers like Vista Equity are setting the standard with cross-functional AI systems.
AI disrupts business models across three dimensions: product logic, revenue models, and value chain. It replaces creative and manual services, shifts traditional content offerings to platform and subscription models, and automates cognitive work, exemplified by fully digital insurance processes. New AI-native competitors operate with platform logic, low marginal costs, and high scalability, necessitating GPs to employ adjacency scans, open-source monitoring, and tech radars for market analysis.
Strategic guiding questions for portfolio companies include identifying value-adding processes supported by AI, recognizing new willingness to pay, understanding the company's role in the AI value chain, scaling offerings through AI, and preparing defensive scenarios.
AI integration in PE also presents risks such as algorithmic biases, lack of transparency, knowledge loss, and data protection/system risks. GPs can address these challenges through diverse data sources, explainable AI, targeted training, robust security measures, and clear governance structures.
In conclusion, AI is a strategic pillar in private equity. Mastering AI technology allows firms to recognize opportunities, manage risks, and secure sustainable competitive advantages.
Source: EY
Private markets 2026: Improving liquidity amid greater AI adoption
In 2025, the US public equity markets saw a resurgence with notable IPOs from tech and AI companies like Figma, Klarna, Circle, and CoreWeave. The third quarter was the most active for IPOs since 2021, raising $14.6 billion from 60 IPOs. This trend is expected to continue into 2026, supported by favourable credit conditions and increased corporate spending on AI. Venture capital is shifting focus from AI infrastructure to broader enterprise adoption, with capital consolidating around experienced managers and category-defining companies. Liquidity is improving through stronger M&A activity and successful IPOs, creating a positive environment for private investors. Buyout activity is also expected to accelerate, driven by easing financing markets and operational improvements through AI. Secondary transaction volume hit a record $162 billion in 2024 and surged 51% in the first half of 2025, with continued momentum expected in 2026. Growth in GP-led transactions and venture secondaries presents attractive buying opportunities. The market environment is becoming more dynamic, with capital flowing through diverse channels, benefiting high-quality companies. Co-investments are gaining interest, offering fee-efficient access to diversified private equity portfolios. Overall, 2026 is anticipated to be a year of increased liquidity and deal activity, with a focus on earnings growth, innovation, and disciplined execution.
Source: Adams Street
How PE survives AI: Areas where firms are being transformed
AI is revolutionizing PE by transforming investment processes, fundraising, and firm management. Leading PE firms are integrating AI across their operations, using AI sourcing tools to scan data sets and develop proprietary models that identify high-potential investments. These tools assess financial metrics and patterns from past investments, enabling teams to focus on the best opportunities. AI-powered interfaces allow for plain language queries, increasing productivity by 35%-85% and reducing diligence tasks from weeks to days. AI also helps in analysing deals, market data, and avoiding blind spots, leading to faster and more detailed results.
AI aids in identifying new growth opportunities, such as selecting new retail sites based on location and consumption data, and integrating technology across various sectors to improve logistics, supply chains, and labour costs. AI tools can also scan potential acquirers and investors, assess market conditions, and simulate exit strategies, providing firms with a scenario-based vision for the future.
In fundraising, AI helps smaller teams find opportunities, identify untapped investors, streamline prospecting, and improve conversion rates by mining historical data and market trends. AI-powered platforms can map the global private wealth landscape to find potential LPs, allowing teams to focus on high-probability prospects and create customized presentations.
AI is becoming the basis of a new operating model for PE firms, enabling data-cantered operations and automating middle and back-office tasks. Firms are investing in training to maximize AI benefits and focusing on their core expertise to attract investors. For more details, refer to the full report by PwC here.
Source: PwC
Expert Opinion
Debunking myths: Private equity’s enduring value proposition
PE investing is evolving amidst record amounts of dry powder, sluggish deal flow, and below-average distributions. Despite fears that PE has lost its way, the industry is adapting through changing investment structures, such as evergreen vehicles and a growing secondary market, which are altering the liquidity landscape and reducing the illiquidity premium. The emergence of an "innovation premium" is driving value creation as highly innovative companies stay private longer, growing larger and transforming industries inaccessible in public markets. This has led to a bifurcation between managers who can access these opportunities and those who cannot. A globally diversified approach is crucial for investors, balancing core PE exposure with secondaries and considering both drawdown and evergreen vehicles.
European PE funds have outperformed their U.S. peers and public markets, driven by strong fundamentals and expanding non-U.S. opportunities. As economic growth moderates and interest rates remain elevated, PE managers with operational expertise and sector knowledge will likely outperform. The liquidity landscape is shifting, offering more opportunities beyond traditional IPOs and M&A. Investors should monitor dealmaking activity and distributions, which are showing signs of recovery. The competitive environment requires careful manager selection, as not all managers will deliver strong results. Hedge funds involve risks such as leveraging, illiquidity, complex tax structures, and high fees. This material is for informational purposes and should not be relied upon for investment decisions. It is subject to risks and may not be suitable for all individuals. Independent professional advice is recommended.
Source: J.P.Morgan Private Bank
Future Outlook
Outlook 2026: Decoupling driving resilient opportunities
Resilience is the key focus for investors amid persistent uncertainty. Schroders’ Global Investor Insights Survey for 2025 highlights portfolio resilience as the top priority for investors through 2026. Despite strong equity market performance and benign bond yields, underlying complexities such as sticky inflation, fiscal pressures, and geopolitical tensions persist. Investors are urged to focus on long-term returns and bottom-up value creation, with private markets offering opportunities due to cyclical and structural forces.
Fundraising, deal activity, and exits have declined, leading to a valuation reset across asset classes. This creates a healthier environment for new investments with attractive entry prices and improved yield potential. Structural trends like the global energy transition, reshoring of supply chains, and digital transformation drive long-term growth. Resilient return opportunities exist in areas with inefficiency, disruption, differentiated risk, and tangible asset-backing, such as small buyouts, private equity, specialty finance, real asset debt, energy transition infrastructure, and operational real estate.
Private equity is recalibrating, restoring balance and discipline. Strategies harnessing local champions, transformative growth, and multi-polar innovation are favoured. Continuation investments allow private equity owners to extend ownership of high-conviction assets, aligning value creation with liquidity. Advances in biotechnology, climate technology, fintech, and deep tech offer diverse entry points.
Private debt and credit alternatives are attractive due to solid corporate and consumer balance sheets and increasing income allocations. Real estate debt, infrastructure debt, and asset-based finance offer compelling income opportunities. Energy transition infrastructure remains a resilient investment theme, supported by global decarbonization efforts and energy security concerns. Renewables represent cost-effective electricity sources, with strong investment opportunities in Europe and Asia.
Resilience is the key focus for investors amid persistent uncertainty. Schroders’ Global Investor Insights Survey for 2025 highlights portfolio resilience as the top priority for investors through 2026. Despite strong equity market performance and benign bond yields, underlying complexities such as sticky inflation, fiscal pressures, and geopolitical tensions persist. Investors are urged to focus on long-term returns and bottom-up value creation, with private markets offering opportunities due to cyclical and structural forces.
Fundraising, deal activity, and exits have declined, leading to a valuation reset across asset classes. This creates a healthier environment for new investments with attractive entry prices and improved yield potential. Structural trends like the global energy transition, reshoring of supply chains, and digital transformation drive long-term growth. Resilient return opportunities exist in areas with inefficiency, disruption, differentiated risk, and tangible asset-backing, such as small buyouts, private equity, specialty finance, real asset debt, energy transition infrastructure, and operational real estate.
Private equity is recalibrating, restoring balance and discipline. Strategies harnessing local champions, transformative growth, and multi-polar innovation are favoured. Continuation investments allow private equity owners to extend ownership of high-conviction assets, aligning value creation with liquidity. Advances in biotechnology, climate technology, fintech, and deep tech offer diverse entry points.
Private debt and credit alternatives are attractive due to solid corporate and consumer balance sheets and increasing income allocations. Real estate debt, infrastructure debt, and asset-based finance offer compelling income opportunities. Energy transition infrastructure remains a resilient investment theme, supported by global decarbonization efforts and energy security concerns. Renewables represent cost-effective electricity sources, with strong investment opportunities in Europe and Asia.
Real estate markets show signs of recovery, with attractive pricing across sectors like logistics, living formats, and hospitality. Tight supply conditions and rising construction costs drive rental increases, laying the foundation for improved long-term performance. Recapitalization opportunities are catalysed by favourable cyclical and structural dynamics, addressing operational complexity and sustainability requirements.
Source: Schroders
