Platform Investing Is Getting Smaller, Sharper, and Slower

The answers show a market that is not frozen but clearly recalibrating.

Across all respondents, no single strategy dominates. Roughly 28% say they are maintaining similar entry sizes but being more selective. Another 28% report pulling back on new platforms in favor of portfolio work. 25% are targeting smaller initial platforms with expansion upside. Just 20% say they are willing to pay up for scarcity quality assets.

That balance matters. It suggests the industry is not collectively chasing the same escape hatch. Instead, firms are adapting based on mandate, cost of capital, and portfolio maturity.

The most aggressive shift shows up among PE sponsors. 40% say they are maintaining similar entry sizes but tightening selectivity. Only 20% are pulling back to focus on portfolio work, and just 20% are paying up for premium assets. The message is clear. Sponsors still want to do deals, but only when conviction is high and downside is underwritten hard.

Corporate development teams look very different. 38% say they are pulling back on new platforms in favor of working existing assets. Only 13% are willing to pay up for scarcity quality targets. For strategics, platform M and A is no longer about expansion at any price. It is about sweating assets already on the balance sheet while waiting for valuation expectations to reset.

Bankers land in the middle. Responses are almost evenly split across all four options, with 26% targeting smaller initial platforms and 22% seeing buyers willing to pay up at the top end. Translation. Processes are still running, but buyer behavior is fragmented and outcome dependent.

The most important signal is what did not happen. There is no overwhelming rush toward smaller platforms, nor a wholesale retreat from platform investing altogether. Instead, selectivity has become the dominant risk management tool. Fewer deals, tighter filters, longer diligence, and a higher bar for underwriting certainty.

For sponsors, this shifts the edge back toward sourcing and judgment. For sellers, it means fewer competitive auctions and more emphasis on quality of earnings and credible growth levers. And for the market overall, it suggests platform investing is not dead. It is just slower, narrower, and far less forgiving.

In this environment, doing nothing is often the smartest first move.