- PE 150
- Posts
- Private Equity Strategies For 2025 Amid New Global Energy Opportunities
Private Equity Strategies For 2025 Amid New Global Energy Opportunities
This week we are reviewing the primary themes that shaped private equity in 2025.
Good morning, ! This week we are reviewing the primary themes that shaped private equity in 2025. A new Morgan Stanley survey reveals a significant readiness gap: 41% of firms feel prepared for an IPO, while only 5% are ready for a tender offer. Meanwhile, the capture of Maduro has opened a massive window for the long-term, capital-intensive investment needed to rebuild the world’s largest oil reserves and export capacity.
Sponsor spotlight: Affinity helps deal teams capture relationship signals automatically and map firm-wide connections—so you can source and move faster. Book a demo →
DATA DIVE
Fewer Deals, Bigger Checks
Private equity isn’t short on capital—it’s short on conviction. Through Q3’25, global PE investment hit ~$1.5T, on pace to beat the last three years, even as deal count keeps falling. The reason: megadeals. In Q3 alone, $537B was deployed, driven by a handful of public-to-private transactions, masking broader caution underneath.
The U.S. accounted for 60%+ of global deal value, while Europe and Asia played defense. Sponsors are prioritizing scale, durable cash flows, and downside protection, not volume. Add-ons remain the preferred deployment tool, while platform buyouts lag far below 2021 peaks.
Bottom line: this isn’t a slowdown caused by lack of money. It’s a selectivity cycle. Until exits normalize and valuations align, headline numbers will keep being propped up by a few very large checks. (More)
TREND OF THE WEEK
Fundraising Gravity Is Real
Consolidation in private equity fundraising is no longer theoretical—it’s measurable. As U.S. Fundraising stays muted, capital is clustering at the top. Through YTD 2025, the Top 10 Funds have captured 45.7% of total capital raised, up sharply from 34.5% in 2024 and well above the 10-year average of 39%.
This isn’t noise. The Five-Year Average sits at just 35.8%, highlighting how quickly concentration has accelerated this cycle. Similar patterns are playing out among the Top 5 and Top 3, pointing to a structural shift, not a temporary pause.
The drivers are familiar: weak exits, slower LP distributions, and tighter capital formation. Allocators are writing fewer checks—and writing them to platforms with scale, diversification, and perceived execution certainty.
Bottom line: mega-funds are winning by default. Everyone else needs a sharper reason to exist. (More)
PRESENTED BY AFFINITY
Affinity is the CRM built for private equity teams. Emails and calendar activity are captured automatically, with firm-wide relationships mapped to target companies and intermediaries so deal teams can see existing connections without manual data entry.
A firm's network is its edge. Relationship intelligence turns that network into action with purpose-built AI that maps firm-wide connections to accelerate deal sourcing, strengthen diligence, and deepen portfolio oversight.
By centralizing relationship context across the deal lifecycle, firms can act earlier, stay aligned, and avoid paying fees for connections they already have.
Supporting our sponsors supports our free newsletters. Please support our sponsors!
PUBLISHERS PODCAST
When Roles Only Exist on Paper (Value Creation)
What breaks teams before it shows up on a dashboard? According to Shiv Narayanan, Founder of leading PE growth consultancy, How To SaaS, dysfunction rarely starts with a blowup, it creeps in through misaligned incentives, ghost roles, and busyness masquerading as strategy.
In this week's featured episode, Narayanan outlines familiar yet dangerous failure modes:
Marketing and sales running parallel instead of together, “leaders” without true ownership, and teams producing at full tilt without knowing why. The diagnosis is blunt: these aren’t tool problems, they’re structural ones. And AI? It just accelerates the direction you’re already going.
The conversation is worth a listen for anyone scaling a firm, running GTM at a portco, or trying to make cross-functional teams actually function. One key quote stuck with us: “Tools don’t fix lack of clarity. They make confusion scale.”
COMPLIANCE CORNER
Navigating the Expanding AML and Sanctions Compliance Landscape in Private Equity
Anti-Money Laundering (AML) and sanctions compliance for private equity (PE) firms in the U.S. is entering a pivotal phase marked by evolving regulatory requirements, heightened enforcement, and operational complexity. Although the landmark FinCEN Investment Adviser AML rule—which would formally impose Bank Secrecy Act obligations on RIAs and Exempt Reporting Advisers serving private equity funds—has been delayed until January 1, 2028, the regulatory environment continues to tighten. Simultaneously, sanctions compliance remains a rigorous, real-time obligation amid sustained cross-agency enforcement focus.
Why it matters:
PE firms historically faced a regulatory gap in AML oversight, but the new and expanded AML program expectations under FinCEN's rule now swing the spotlight firmly on investment advisers for AML/CFT programs that encompass risk-based procedures, ongoing customer due diligence, suspicious activity reporting, and recordkeeping. The delay provides a window for preparation, but enforcement against AML program deficiencies and sanctions violations is already active under existing laws and from multiple regulators including the SEC, DOJ, OFAC, and state authorities. (More)
LIQUIDITY CORNER
IPOs vs. Tender Offers: Who’s Actually Ready to Exit?
A new Morgan Stanley survey reveals a striking disparity in liquidity readiness: 41% of organizations say they are “very prepared” for an IPO, compared to just 5% for a tender offer.
The gap highlights a fundamental misalignment between perception and reality. Tender offers—often the more practical path in today’s tight capital markets—get less attention internally, even though the IPO window remains effectively shut for most private firms. Instead, 56% of respondents say they’re only “somewhat prepared” for tender offers, while 39% aren’t prepared at all.
Why it matters:
GPs are still culturally anchored to public exits, but in practice, secondary solutions like tender offers, continuation vehicles, and NAV loans are where the action is. For firms seeking liquidity in 2025, readiness is a competitive edge—and right now, many are behind the curve. (More)
MACROVIEW
From Dictators to Discounted Barrels
Private equity just got a geopolitical gift. The capture of Nicolás Maduro and potential reboot of Venezuela’s oil sector marks a generational re-entry point for U.S. capital. Despite holding the world’s largest proven oil reserves, Venezuela currently produces less than 1.3% of global supply—a massive delta driven not by geology but by decades of state mismanagement. With oil majors sidelined (thanks to PTSD from past nationalizations), PE sponsors can be uniquely positioned to underwrite the long game: from pipeline triage to refinery rebuilds, and even LNG integration, by providing long term cash via equity investments or private lines of credit.
Forget quick trades—this is a 15-year CAPEX thesis with regime risk built in. And while oil prices barely budged post-capture, that’s the tell: the market’s not pricing the upside yet. PE should be. (More)
MICROSURVEY
Where is your firm currently allocating more incremental capital? |
PRIVATE CREDIT
More Deals, Fewer Weddings
Deal Flow is booming. Deal Closings are not.
Private credit managers are reviewing more opportunities than ever, yet most are saying “no” far more often than “yes.” Conversion Rates remain stubbornly low, with the majority of firms closing less than 2% of the deals they screen.
Regionally, the gap is stark. In the UK/EU, nearly 45% of managers close under 1% of reviewed deals—effectively one successful transaction per hundred first dates. The U.S. looks marginally better, with a heavier concentration in the 2–3% conversion range, but discipline still dominates deployment decisions.
Only a thin slice of managers report closing more than 5% of screened deals, reinforcing a familiar theme: capital is plentiful, conviction is not.
Bottom line: In private credit, competitive edge comes from speed to kill, not speed to close—prioritizing downside protection, sponsor quality, and durable cash flows over headline volume. (More)
DEAL OF THE WEEK
VB Spine Expands European Manufacturing Platform
VB Spine completed the acquisition of Stryker’s spine implant manufacturing facility in Cestas, France, further expanding its global manufacturing footprint and reinforcing its position as the largest privately held spine company.
The state-of-the-art Cestas facility brings experienced talent, established infrastructure, and uninterrupted operations, strengthening VB Spine’s vertical integration and long-term manufacturing strategy. The site will also support expanded medical education and surgeon training programs across Europe.
The transaction builds on the April 2025 carve-out of Stryker’s U.S. spine business, underscoring VB Spine’s disciplined buy-and-build strategy under the leadership of the Viscogliosi Brothers.
Why it matters: The deal exemplifies how sector-focused family offices can leverage carve-outs to scale global platforms, pairing operational control with durable growth in specialty MedTech. (More)
TWEET OF THE WEEK
Affinity helps PE deal teams capture relationship activity automatically and see firm-wide connections — so you move faster with less manual work.
Supporting our sponsors supports our free newsletters. Please support our sponsors!
"Do not be embarrassed by your failures, learn from them and start again."
Richard Branson