Good morning, {{first_name}}! This week, we’re looking at how private capital is positioning around AI and the infrastructure required to scale it. We also revisit the latest Nobel Prize in Economics, which offers a useful lens for today’s macro environment: monetary policy works through expectations and real interest rates, not simply through the Fed funds rate.

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

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

DATA DIVE

Stat: Private investment in AI infrastructure, models, research and governance reached roughly $140 billion in 2025, versus about $40 billion in 2024. Data management and processing ranked a distant second at roughly $30 billion, while every other focus area remained materially smaller.

Context: The biggest checks are moving toward the foundational layer of AI. Investors are financing the compute, data architecture, models and infrastructure that nearly every downstream application depends on. At the same time, thousands of newly funded AI companies are expanding the application layer, creating a market that is becoming more concentrated by dollars but more fragmented by use case.

Strategic Takeaway: For private equity, the opportunity is increasingly about choosing where to sit in the AI stack. Infrastructure offers broad exposure to adoption across sectors, while applications require sharper bets on product differentiation and monetization. The next source of alpha may come from underwriting the picks and shovels rather than trying to predict the winning app. (Read Full Report)

TREND TO WATCH

Take private activity is slowing in 2026, but zoom out and the bigger shift is hard to miss. From 2016 through 2020, take privates represented just 14.71% of all private equity deals. Since 2021, that share has more than doubled to 30.05%.

The current pullback looks more like a pricing problem than a loss of appetite. Global take private value fell 18% to $79.71B in the first half of 2026, while the S&P 500 gained 9.5%, making public targets increasingly expensive. Even that $79.71B is heavily concentrated, with the pending $48.08B AES acquisition accounting for more than half of activity.

For sponsors, the message is clear. Public to private transactions have moved from opportunistic trade to core sourcing strategy, but entry discipline matters again. With fundraising increasingly rewarding managers that can return capital, paying public market premiums without a credible exit path is a tougher sell. (More)

HubSpot's CRM is so smart, it now updates itself. Calls get logged and summarized the moment they end. New leads get researched and a first outreach drafted, automatically. Deals move forward on their own, with next steps flagged before you have to ask. 

Even the one repetitive task you've been meaning to fix can now run itself, no code required. Customers using it are already seeing the difference. 

This isn't the CRM you have to work hard to figure out. It's the one already working before you log in.

Get a Demo

AI in Private Equity: Myth vs Reality

Private equity has moved past asking whether AI matters. The harder question is whether it is actually creating value.

KPMG found that 68% of asset management and PE leaders are piloting AI agents, while another 24% are already deploying them. Yet only 40% expect measurable ROI within the next twelve months.

That gap matters because adoption alone says very little about economics.

McKinsey studied 471 PE backed companies across 31 industries and found that median revenue multiples increased from 13x among opportunistic AI adopters to 31x among companies using AI to build new businesses. The biggest valuation gains appeared when AI moved beyond productivity and became part of the product, revenue model, or customer proposition.

For sponsors, the implication is straightforward. Buying better models is unlikely to create a durable edge. Proprietary data, redesigned workflows, management adoption, and measurable revenue or EBITDA impact are becoming the real differentiators.

The AI race in private equity is shifting from access to execution. (More)

DILIGENCE CORNER BY 150 DILIGENCE

Fragmentation can make a market look unusually attractive. Local competitors are unsophisticated, pricing is inconsistent, technology adoption is limited, and a scaled platform appears to have plenty of whitespace.

But what if everyone sees the same opportunity? PwC notes that private equity continues to consolidate fragmented business services markets into platforms, with the focus increasingly shifting from simply acquiring businesses to integration, pricing discipline, standardized delivery, technology, and professionalized operations.

That can change the competitive standard quickly. McKinsey found a similar pattern in industrial distribution, where scaled and digital competitors pushed customers toward better service, greater price transparency, real time inventory visibility, and omnichannel purchasing.

For diligence teams, the key question is not simply whether a market is fragmented today. It is whether that fragmentation is durable.

If institutional capital professionalizes the sector during your hold period, yesterday’s operational advantage can become tomorrow’s minimum requirement.

Bottom line: Underwrite the market you may exit into, not just the one you are buying into. (More)

MACROVIEW

The Hall and Woodford framework offers a useful way to read the current macro setup: monetary policy works through expectations and real rates, not just the Fed funds rate. That distinction matters when growth remains firm while financing conditions keep tightening.

Second quarter real GDP growth was revised to 2.2%, consumer spending grew 3.8%, and underlying domestic private sector demand expanded at roughly 4.6%. That resilience gives the Fed less urgency to ease. Meanwhile, the 10 year Treasury yield has moved above 5%, driven largely by rising real yields rather than inflation expectations.

For private equity, the transmission is straightforward. Higher real yields increase discount rates, pressure deal multiples, raise debt service costs, and make refinancing more difficult. With real yields approaching 3%, public equity valuations have already compressed toward roughly 19x forward earnings.

The implication for sponsors is uncomfortable but useful: rate stability does not equal easier money. Underwriting should assume a persistently higher real cost of capital, with returns increasingly dependent on earnings growth, pricing power, margin improvement, and operational execution rather than multiple expansion. (More)