$346B Deployed, 19% of Exits via CVs, What Changed in PE

Good morning, ! This week we're breaking down management fees hitting a record-low 1.61%, continuation vehicles now driving ~19% of sponsor-backed exits, a capital-over-labor economy with job growth at decade lows, $346B in North American deal value flowing only into near-zero–risk deals, and new SEC rules expanding the fundraising funnel beyond traditional LPs.

Sponsor spotlight: Affinity’s report breaks down 7 best practices top PE firms use to turn relationship intelligence into better sourcing—finding warm paths early, tightening banker coverage, and building firm-wide visibility. Download Report →

DATA DIVE

The New Math of Private Equity—Quality In, Risk Out

Private equity dealmaking rebounded in 2025, but not with a rising tide—rather, with a highly selective current. The $346.5B in announced deal value in North America dwarfed Europe ($69.9B) and APAC ($46.3B), underscoring how sponsors are now concentrating firepower where capital markets are deepest and exits are clearest. It’s not global momentum—it’s regional conviction.

Deal size data also tells the story: median deal values clustered in “defensible” sectors like Financials ($285M) and Utilities ($258M), while Technology and Consumer sectors lagged, reflecting tighter underwriting and limited appetite for macro-sensitive bets. This discipline extended to exit dynamics, with 64% of IPOs posting positive EBITDA—double the 2019 figure—as public markets now demand profitability, not promises.

Perhaps most telling: cancellation rates on the 25 largest deals dropped to just 4%, down from as high as 36% earlier in the cycle. Capital is being deployed—but only when execution risk is near-zero.

Bottom line: The private equity market entering 2026 isn’t about velocity. It’s about visibility. Sponsors with the patience to underwrite profit, not potential, and the discipline to avoid frothy deal flow are poised to outperform in a structurally tighter, but higher-quality, environment.

Read the Full Report HERE

TREND OF THE WEEK

Discount Season Hits PE Fees: Private Equity Management Fees Hit New Low in 2025

Private equity just broke tradition: 2025 vintage funds posted a record-low average management fee of 1.61%, per Preqin. That's not a rounding error—it’s a crack in the industry’s sacred “2 and 20”. Blame it on fundraising fatigue and capital consolidation: nearly half the year’s fundraising haul went to the 10 largest funds.

The big guys can afford lower percentages—fixed costs scale nicely when you’re sitting on a billion-plus. But don’t confuse lower rates with less money: fee dollars are still piling up. Smaller and middle-market funds, meanwhile, cling to the 2% baseline like it’s a flotation device in a stormy LP ocean. Preqin sees fee compression continuing into 2026, assuming fund sizes keep swelling. The big question: will PE fees ever start resembling those in public equity? Don’t bet your carried interest on it.

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7 Best Practices Driving PE Deal Flow From Affinity

Private equity firms face rising competition as auctions drive valuations higher and differentiation lower. The firms that consistently outperform are not simply deploying more capital. They are managing networks more strategically, uncovering warm paths into targets before processes begin, maintaining disciplined banker coverage, and creating visibility across every relationship.

This best practices guide highlights seven proven strategies used by leading firms to source proprietary deals, streamline execution, and position portfolio companies for stronger exits. Built around real-world examples, it shows how relationship intelligence is reshaping private equity deal making from origination through exit.

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PUBLISHERS PODCAST

Introducing No Off Button: Conversations with founders/investors

Relentless builders don’t wait for permission, and they don’t hit pause. No Off Button goes inside the minds of operators who keep compounding when others tap out.

This week, Aram sits down with Walker Deibel, WSJ bestselling author of Buy Then Build and founder of Acquisition Lab. Walker makes a PE-relevant case that hits close to home: building from zero is often the worst risk-adjusted bet, while buying profitable, owner-operated businesses offers immediate cash flow, control, and asymmetric upside.

The conversation dives into acquisition entrepreneurship, the Silver Tsunami of baby boomer exits, and why “boring” industries deliver better downside protection than most venture-backed plays.

Why PE should care: this is roll-up logic, applied at the individual-operator level, capital discipline, cash yield, and buying earnings instead of narratives.

Watch the Episode

COMPLIANCE CORNER

Navigating the New Frontier of PE Fundraising: Rule 506(c) and Beyond

The SEC just made it easier to talk big in private equity—literally. Recent tweaks to Rule 506(c) allow GPs to openly solicit capital with looser verification rules (think: minimum investments and investor checkboxes).

This opens the door to retailization: the mass-affluent investor is now in play. But before you spin up a TikTok campaign, remember: the SEC also turned up the heat on anti-fraud enforcement. Advertising may be easier, but the watchdog’s bite is sharper—especially around performance puffery, conflicts, and preferential terms. Compliance teams, your “pre-approval” playbooks need an upgrade. The upside? More capital. The downside? More exposure. Proceed boldly—but also, maybe bring a lawyer to the brainstorm. (More)

LIQUIDITY CORNER

The Rise of the CV Economy

As traditional exits stall, Continuation Vehicles (CVs) are quietly becoming private equity’s most reliable liquidity valve. By June 2025, CVs represented 19% of sponsor-backed exits, a sharp jump from roughly 5% in 2020–21. That’s not innovation—it’s adaptation.

The numbers tell the story. CV volume climbed from $26bn in 2020 to $63bn in 2024, before easing to $41bn YTD 2025. With IPOs muted and strategic M&A selective, GPs are using CVs to do two things at once: return capital to LPs and hold onto high-conviction assets that still have runway.

But scrutiny is rising. LPs now expect valuation discipline, governance rigor, and credible multi-year value creation, not financial gymnastics.

Bottom line: CVs have moved from workaround to structural feature of PE liquidity. (More)

MACROVIEW

Jobs, Not Profits, Are the Missing KPI

The U.S. labor market has entered a “low-hire, low-fire” limbo. Job growth in 2025 was the weakest in a decade (outside the pandemic), yet the unemployment rate barely budged. Why? Companies are dodging both hiring and firing while quietly betting on automation over labor. Despite this stagnation, equity markets are ripping, pricing in an AI-fueled productivity boom that may never trickle down.

The paradox? Rising valuations with flat labor income. For PE and corporate strategists, this is a macro backdrop where capital beats labor—until consumer demand becomes the constraint.

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Affinity helps PE deal teams capture relationship activity automatically and see firm-wide connections — so you move faster with less manual work.

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