Sports Gets Institutional, Evergreen Grows & Exits Reopen

Good morning, ! This week we're covering private equity`s investment trends in sports, evergreen strategies as the new fundraising machine, what constitutes an actionable acquisition pipeline, and the exit window coming back. 

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DATA DIVE

Sports’ Growth Engine Is Getting More Diversified

Sports is no longer just a media-rights story. PwC expects team/franchise valuations to grow 7.9% annually in 2025, followed by betting-related revenue at 7.7% and commercial & sponsorship revenue at 6.5%. Media rights, meanwhile, are expected to grow just 5.1%, down from 6.1% in 2023.

That shift matters for private equity. The sports investment thesis is increasingly tied to the ability to monetize an expanding ecosystem around the underlying asset—not simply sell broadcasting rights. Sponsorship, betting, merchandise and consumer monetization create additional revenue pools, while scarcity continues to support franchise valuations.

The PE opportunity, therefore, is less about betting on the next media-rights deal and more about building multiple revenue engines around a scarce asset. The report reinforces the trend: sports is becoming an increasingly institutional asset class, with global audiences, digital platforms and new commercial channels expanding the TAM.

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TREND TO WATCH

Private Equity’s Next Fundraising Machine?

Evergreen funds are moving from niche product to industry-wide strategy. Global assets in indefinite-life structures could reach $4.4T by 2029, up from $2.7T in 2024. The appeal is straightforward: investors get periodic liquidity and immediate exposure to private assets, while managers gain a more permanent pool of capital.

That changes the fundraising equation for PE. Traditional drawdown funds depend on a cycle of fundraising, deployment, exits and distributions. Evergreen vehicles keep capital working—and allow investors to enter and redeem periodically rather than committing to a fixed fund life. EQT notes that the structure is particularly attractive as private markets become more accessible to wealth investors and family offices.

But the “liquidity” comes with an asterisk. Evergreen funds are still backed by illiquid assets, meaning redemptions can be restricted during periods of market stress. Managers also need to hold liquid assets to meet withdrawals, potentially reducing returns.

For PE managers, the opportunity is bigger than a new product wrapper: evergreen could become a new engine for permanent AUM growth.

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DILIGENCE CORNER BY 150 DILIGENCE

Can You Actually Underwrite the Roll Up?

“Fragmented market” might be one of the most seductive phrases in a private equity pitch deck. Thousands of independent operators, limited institutional ownership, and plenty of white space can make a consolidation strategy look almost mechanical.

But fragmentation does not equal an actionable acquisition pipeline.

The real diligence starts by shrinking the universe. How many targets actually fit the platform’s size, geography, customer mix, and quality requirements? Of those, how many owners are willing to sell? How many can be acquired at a price that preserves the original return thesis? And how many can management realistically integrate without stretching the organization?

That distinction matters when returns depend on repeated acquisitions. A thesis requiring several add ons every year is implicitly underwriting sourcing, seller willingness, acquisition pricing, and integration capacity all at once.

The best downside test is simple: remove half the assumed acquisitions and increase the purchase price on the rest. Does the deal still work?

If not, you may not be underwriting a platform. You may be underwriting a pipeline that does not exist yet. (More)

LIQUIDITY CORNER

The Exit Window Is Finally Reopening

Private equity has spent the last few years sitting on assets and waiting for a more cooperative exit market. That patience is starting to pay off.

Goldman Sachs’ 2026 M&A Outlook shows global dealmaking back at extraordinary levels: total M&A volumes are up 45% YoY, while sponsor M&A volumes have risen 57%. Mega-deals are driving much of the acceleration, with volumes up 108% globally.

For sponsors, the more important signal is liquidity. Goldman expects the combination of stronger equity markets, renewed IPO activity and accelerating M&A to help distribution rates move back toward historical averages. At the same time, continuation vehicles and other structured solutions are becoming increasingly mainstream, giving GPs another way to return capital without fully giving up their best assets.

Bottom line: the exit bottleneck is loosening. The question for PE firms is shifting from “When can we exit?” to “Which assets should we monetize now—and which are worth holding for the next leg of the cycle?”

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MACROVIEW

Bad News Is Still Good News (for Now)

U.S. macro signals this week strengthened the case for a disinflationary slowdown rather than an outright recession. Softer inflation and producer-price pressures were joined by a 0.6% decline in July retail sales, reinforcing evidence that demand is cooling. Meanwhile, recent labor-market weakness suggests hiring momentum has faded considerably.

For markets, that combination remains constructive. Moderate weakness reduces inflationary pressure and lowers the probability of additional Fed tightening, supporting lower short-term yields and higher equity valuations. In other words, bad economic news can still be good market news as long as earnings expectations remain intact.

But that relationship has limits. Investors are progressively adapting to a softer-growth, lower-rate environment, making the next phase increasingly dependent on the severity of the slowdown.

The signal to watch is cross-asset: if weak data continue to produce lower yields, rising equities, and stable credit spreads, the soft-landing thesis remains intact. If equities fall and spreads widen alongside yields, the market has begun pricing recession. (More)