$43.6B in Dividend Recaps, 44% Liquidity Pressure, and AI-Driven EBITDA

Good morning, ! This week we’re unpacking PE’s AI implementation in portfolio valuations, dividend paid to sponsors via leveraged loan market , the share of private credit assets showing signs of distress, and how much pressure are PE execs having to facilitate a liquidity event.

Want to advertise in PE 150? Check out our self-serve ad platform, here.

Know someone who would love this? Pass it along—they’ll thank you later! Here’s the link.

DATA DIVE

AI is EBITDA’s New Best Friend

AI isn’t window dressing anymore—it’s your new core ops partner. In a market where exit windows are tighter than a LBO model in Excel, private equity is leaning hard into AI-driven EBITDA expansion. Forget marginal automation—AI is showing up in portfolio-wide pricing engines, predictive maintenance, and even revenue growth levers like personalization and cross-selling. With $2.6–$4.4 trillion in annual AI value forecasted globally, and most of it captured pre-IPO, sponsors with clear AI playbooks are not just riding the wave—they're compounding returns on it .

Read the Full Report HERE

TREND OF THE WEEK

Borrowing Beats Selling

When the exit door is locked, private equity looks for windows. In 2025, that window is the leveraged loan market.

After bottoming out at about $5B in 2022, dividend recaps have staged a rapid comeback—~$13.5B in 2023, ~$33.0B in 2024, and $43.6B already in 2025, with weeks still left on the clock. That’s a fresh high, eclipsing the 2021 peak that came with near-zero rates.

The logic is simple. Credit investors want yield, sponsors want liquidity, and exits remain elusive. Dividend recaps now function as a DPI substitute, not a victory lap.

But leverage cuts both ways. These deals stack new debt onto portfolios facing tighter regulation and elevated interest costs. It works—until it doesn’t. Still, the message is unmistakable: cash now, patience later. (More)

PRESENTED BY GOOGLE ADSENSE

Banish bad ads for good

Your site, your ad choices.

Don’t let intrusive ads ruin the experience for the audience you've worked hard to build.

With Google AdSense, you can ensure only the ads you want appear on your site, making it the strongest and most compelling option.

Don’t just take our word for it. DIY Eule, one of Germany’s largest sewing content creators says, “With Google AdSense, I can customize the placement, amount, and layout of ads on my site.”

Google AdSense gives you full control to customize exactly where you want ads—and where you don't. Use the powerful controls to designate ad-free zones, ensuring a positive user experience.

Take control of your ads

LIQUIDITY CORNER

Older, Richer, Under More Pressure

According to J.P. Morgan, founders and investors with over 10 years in business are feeling the heat: 44% report “a lot of pressure” to facilitate a liquidity event — more than double the pressure felt by Series A-B peers (19%).

The data cuts across stage and tenure. Series C+ companies are also under strain, with 63% reporting moderate to high pressure. But it’s time — not just capital raised — that correlates most strongly with urgency. Founders who’ve been in the game longest are under mounting pressure to deliver returns, distribute carry, or reset incentive structures.

Why it matters:

GPs managing legacy assets or mature portfolio companies may face increased scrutiny from LPs and internal stakeholders to crystalize value. This creates a growing tailwind for secondary sales, continuation funds, and structured liquidity tools.

The longer you wait, the louder the clock ticks. (More)

DEAL OF THE WEEK

JPMorgan’s Private-Equity Group closes $1.44 billion fund

J.P. Morgan Asset Management’s Private Equity Group (PEG) just hit $1.44B for its 12th flagship fund, GPE XII, blowing past a $1.25B target. The strategy? Stick to what works: small and mid-market GPs across buyout and early-stage VC, with a blend of primaries, secondaries, and co-investments.

It follows a similar playbook to PEG XI ($1.28B closed in 2024), but with even more dry powder. Backed by a network of 250+ PE sponsors and $36B in assets under management, this group isn’t just a passive LP—it’s a co-investment engine. PEG’s momentum mirrors broader LP appetite for diversification without complexity. Bonus: their co-investment fund, COIN II, also closed above target at $1B. PEG’s message is clear: in this market, go small to scale big. (More)

TOGETHER WITH MONEY.COM

Could you go from being $50k in debt to $20k?

If you feel you're languishing in debt, debt relief companies can take over negotiations with your creditors and potentially get them to accept up to 60% less than you owe. Sounds too good to be true? Our debt relief partners have already helped millions of Americans just like you get out of debt. Check out Money’s list of the best debt relief programs, answer a few short questions, and get your free rate today.

Find debt relief

PRIVATE CREDIT

The Era of Soft Distress

Distress is rising in private credit, but it’s arriving more like a fog than a storm. According to recent survey data, 63% of lenders report that just 0%–5% of their portfolios show signs of distress—missed payments or defaults forecast within 12 months. Another 17% sit in the 5%–10% bucket, while only a narrow ~4% report distress north of 15%.

That pattern carries through to enforcement. Roughly one-third of lenders saw no creditor remedies over the past year, and among those that did, 70% say less than 5% of assets required consensual restructurings tied to underperformance.

Call it “soft distress”: balance sheets under pressure, but still holding. Expect more amend-and-extend, NAV support, and sponsor intervention before the workout playbook truly comes out. (More)

MICROSURVEY

Big Appetite, Smaller Bites

The middle market is still private equity’s playground—but it’s getting a bit… grittier. In our latest PE150 micro-survey, 36% of respondents said they’re chasing sub-$100M EV platforms, outpacing all other bands.

That’s right: deals below $100M now beat out $100–250M (25%) and even the $250–500M range (23%). Only 16% of GPs said they're targeting platforms above $500M—likely the ones still playing musical chairs with credit committees.

The takeaway? The gravity is pulling down. And in today’s rate-sticky, structure-hungry environment, smaller platforms are where the sourcing edge lives. (More)

MACROVIEW

Geopolitical Risk Lights a Match Under Oil Prices

Crude oil markets are doing their best impression of a fire alarm test—blaring at even the whiff of U.S.-Venezuela tension. Despite ample U.S. production and OPEC+ steadiness, Brent and WTI are rising on geopolitical fumes alone. Venezuela’s ~600K barrels/day sounds minor—until you remember oil markets run on margins, not magnitude. Futures markets have already baked in risk premiums, with WTI bouncing off multi-month lows thanks to short-covering.

A U.S. military incursion could push WTI through technical ceilings near $58.59, reinforcing a self-fulfilling upward spiral. Past crises—from Ukraine to mid-2010s supply shocks—show that prices don’t just rise, they overshoot. Oil doesn’t care that it’s just 1% of global supply—political risk is king when spare capacity is tight and traders are trigger-happy. (More)

COMPLIANCE CORNER

Safeguarding Client Assets: The SEC’s Custody Rule Overhaul 

Regulators are quietly pushing one of the most consequential compliance developments for private-fund advisers: an expanded Safeguarding Rule that would replace the old Custody Rule under the Investment Advisers Act. The proposed overhaul would broaden “custody” to cover any client assets an adviser can control — from traditional funds and securities to digital assets and other investment positions — and require more stringent protections, including the use of qualified custodians and enhanced reporting and verification obligations.

Even though the rule has not yet been finalized, the SEC’s efforts to modernize how advisers safeguard assets remain active and contested. Industry groups have raised concerns about cost and operational strain, and regulators continue to enforce custody obligations — most recently penalizing advisers for failing to comply with surprise examination and audit requirements under the existing rule. 

For private-equity sponsors, this means custody isn’t just a box to check anymore. As investors demand stronger asset protection and regulators scrutinize how advisers hold and report client assets, firms should revisit custody arrangements, documentation, and qualified custodian relationships now — before new rules reshape them again. (More)

INTERESTING ARTICLES

TWEET OF THE WEEK

"Get busy living or get busy dying."

Stephen King