Gaming Deals Surge as Policy Uncertainty Returns

Good morning, ! This week we're covering private equity`s investment trends in the gaming industry, global PE fundraising activity by top 10 firms AUM, evergreen capital continues on the rise, and Economic policy uncertainty returning to disrupting levels.

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DATA DIVE

Gaming Is No Longer Entertainment. It Is Infrastructure.

For years, investors treated gaming like a cyclical media business tied to console launches and hit titles. The data now points somewhere else entirely. Global gaming revenue climbed from $285B in 2019 to $475B in 2024, making the industry roughly 15x larger than either global box office film or music revenue individually. At the same time, 79% of consumers now play games on at least one device, with smartphones driving the majority of engagement.

The bigger story is how gaming monetizes. This is no longer a one time purchase model. Hardware, in game advertising, subscriptions, virtual goods, live services, and creator ecosystems have transformed gaming into a recurring commerce engine built around attention and identity. In game advertising alone expanded from $38B to $110B in five years.

Institutional capital sees the shift clearly. PE and VC backed gaming investment surged to $56B in 2025, versus just $4B the year prior, signaling that sponsors believe valuations have reset and consolidation opportunities are back.

Bottom line: gaming is no longer competing with entertainment categories. It is competing with social media, digital commerce, and software ecosystems for consumer time, engagement, and wallet share. (Link to Report)

TREND TO WATCH

The Mega-Fund Slowdown Is Becoming Structural

Private equity fundraising is entering a very different era. After years of near-unlimited capital inflows, the largest PE firms are now facing a clear slowdown in fundraising momentum. Aggregate capital raised by the top 10 PE firms by AUM peaked at $108.6B in 2021, fell to $85.2B in 2024, and is projected to decline further to $75.8B in 2025. At the same time, the number of funds in market is shrinking rapidly, highlighting growing LP selectivity.

This is no longer just a cyclical pullback. LPs remain pressured by the denominator effect, slower distributions, and a stronger focus on consolidating manager relationships. As a result, capital is increasingly flowing toward fewer, larger, and more established platforms with differentiated track records and liquidity capabilities.

To adapt, many firms are expanding into private credit, infrastructure, secondaries, and evergreen vehicles. The message is becoming clear: fundraising success in private markets is now increasingly driven by scale, durability, and platform diversification. (More)

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DILIGENCE CORNER BY 150 DILIGENCE

Who Really Sets the Price?

One of the easiest ways to misprice a deal is to assume the company controls pricing when it does not. In many business models, the real price setter sits outside the business, whether through commodity inputs, dominant customers, procurement teams, platforms, regulators, or market clearing dynamics.

That distinction matters because margin resilience often depends less on execution and more on external variables management cannot control. A power producer may look operationally strong, but if fuel costs determine clearing prices, earnings can deteriorate quickly when commodity spreads compress. The same logic applies to industrial suppliers squeezed by procurement teams or marketplace sellers operating under platform algorithms.

The chart highlights the real diligence test: sensitivity. Once EBITDA margins begin moving linearly against a single pricing variable, the investment case becomes a question of breakpoints, not growth projections. A modest shift in the key driver can move a business from healthy profitability into value destruction territory.

Bottom line: pricing power is often an illusion. The smartest diligence starts by identifying who actually sets the price.

LIQUIDITY CORNER

Evergreen Capital Is Quietly Rewriting the Liquidity Playbook

Evergreen private equity funds still represent a small slice of the market today at roughly $0.2T of AUM versus $6.6T in traditional drawdown structures. But by 2030, evergreen assets are projected to triple to $0.6T, while overall PE AUM approaches $8.8T.

That gap matters less than the growth rate. Investors are increasingly prioritizing flexibility over the classic ten year lockup model, especially after several years of delayed exits and weak distributions. Evergreen vehicles offer periodic liquidity, continuous fundraising, and a way for managers to keep capital deployed without forcing asset sales into soft markets.

For GPs, this is not just a product expansion story. It is a response to a market where liquidity timing has become unpredictable. Traditional drawdown funds depend on exits to recycle capital and generate DPI. Evergreen structures reduce that dependence by creating a more permanent capital base.

Bottom line: private equity is slowly moving from a transaction driven liquidity model toward an access driven one. In a slower exit environment, evergreen capital may become less of an alternative and more of a necessity. (More)

MACROVIEW

Global Uncertainty Climbs Amid Trade and Geopolitical Tensions

Economic policy uncertainty has returned to levels typically associated with major global disruptions. New data from both the Global Economic Policy Uncertainty Index and the U.S. index show a sharp rise in volatility driven by a combination of trade tensions, geopolitical instability, and persistent inflation concerns. Unlike the 2008 financial crisis or the COVID-19 shock, today’s uncertainty is not tied to a single event, but rather to overlapping structural risks. Escalating conflict in the Middle East, renewed tariff measures, and shifting global supply chains are creating a more fragmented economic environment. While labor markets and financial institutions remain relatively resilient, businesses are increasingly delaying investment decisions and reassessing global exposure as policy unpredictability becomes a defining feature of the current macroeconomic landscape. (More)

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Henry David Thoreau