The Next Commodity Supercycle Might Be Underground

Good morning, ! Before we jump into today's issue, we're excited to announce the launch of our upcoming AI / Data & Insight Private Capital Breakfast we’re cohosting with CapLink Group.

Join private equity investors, M&A professionals, and corporate strategy leaders for a morning of conversations on how AI is transforming investing, due diligence, and value creation.

Now, onto this week's edition: we're covering private equity's investment trends in metals and mining, countries' competitiveness in productive assets, alternative data sources in commercial due diligence, and the evolving international role of the US dollar.

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DATA DIVE

The Next Commodity Supercycle Might Be Underground

For years, private capital largely ignored metals and mining, favoring software, healthcare, and other asset light sectors. But the world has changed. Artificial intelligence, electrification, defense spending, and the energy transition all share one common denominator: they require enormous quantities of critical minerals. Copper, lithium, nickel, and rare earths have become strategic assets rather than simple commodities.

The data reveals an interesting contradiction. While PE and VC investment in metals and mining surged to $12.2 billion in 2023, the sector's share of overall deal value has since fallen to just 2% in 2025. Yet investor participation remains robust, with deal count reaching 126 transactions, one of the highest levels in recent years. Capital is becoming more selective, not less interested. Investors are placing smaller, more targeted bets across the critical minerals ecosystem.

This divergence between lower capital deployment and elevated deal activity could be one of the most important signals in private markets today. Historically, periods of underinvestment in resource sectors have created the conditions for future supply shortages and outsized returns. As governments and corporations race to secure strategic supply chains, the opportunity may extend far beyond mining itself and into processing, refining, recycling, and infrastructure.

Bottom line: The market may be allocating less capital to metals and mining today, but the world's dependence on critical minerals continues to rise. In private markets, the biggest opportunities often emerge where strategic importance is increasing faster than investor participation. Critical minerals may be becoming the new infrastructure, and sophisticated investors are already positioning accordingly.

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TREND TO WATCH

The New Geography of Capital

Countries that invest the most in productive assets are increasingly becoming the world's most competitive economies.

McKinsey's latest research argues that competitiveness is increasingly determined by a country's ability to build productive capacity. China now holds productive assets worth 3.1x GDP, compared with 2.0x in the United States and 1.7x across the European Union—roughly a 70% advantage over the average of the two Western economies. That gap reflects decades of investment in infrastructure, industrial facilities, machinery, and intellectual property, creating productive capacity that is difficult to replicate quickly.

For private equity, the implications extend well beyond macroeconomics. Markets that consistently attract and deploy productive capital tend to develop stronger industrial ecosystems, deeper deal pipelines, and more resilient exit environments. As governments compete to accelerate permitting, expand energy infrastructure, and attract strategic industries such as AI, semiconductors, and advanced manufacturing, geography is once again becoming a source of competitive advantage.

The next decade won't simply reward the fastest-growing economies—it will reward the ones that keep building.

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DILIGENCE CORNER BY 150 DILIGENCE

The Best Customer Survey Might Be a Credit Card Swipe

Private equity firms have never had more information at their fingertips. Yet the biggest shift in commercial diligence is not the volume of data. It is the type of data. Traditional customer interviews and expert calls are increasingly being supplemented by alternative datasets that provide real time visibility into how businesses are actually performing.

A credit card transaction can reveal changes in consumer spending months before financial statements arrive. Website traffic can indicate whether customer acquisition is accelerating or slowing. Job postings can signal expansion plans, while app downloads and pricing data can expose shifts in market share and competitive positioning. These digital breadcrumbs, often referred to as data exhaust, are giving investors a new way to validate management narratives and pressure test underwriting assumptions.

The implication for dealmakers is straightforward. Information asymmetry is shrinking. Access to data is becoming democratized, which means competitive advantage increasingly comes from interpretation rather than possession. The firms that can connect these disparate signals faster and more effectively than competitors will be better positioned to identify inflection points, spot risks early, and underwrite conviction where others still see uncertainty.

Why it matters: Commercial diligence is evolving from periodic snapshots to continuous monitoring. In a market where the best assets are won on speed and conviction, turning digital exhaust into actionable intelligence may become one of private equity's most valuable competitive advantages. (More)

LIQUIDITY CORNER

Europe's Exit Window May Be Opening

Europe's M&A market is proving more resilient than many expected. As the chart shows, dealmaking has remained comparatively stable over the past several quarters, even as activity in North America has become more volatile. According to PitchBook, European M&A deal value fell just 6.4% quarter-over-quarter in Q2 2026, compared with a 26.3% decline in North America—a sign that buyers remain active despite a higher-rate environment.

For private equity, that's an encouraging signal. A more resilient M&A market expands the pool of potential buyers, improves confidence around valuations, and creates additional pathways to liquidity beyond IPOs. While financing costs remain elevated and sponsors continue to be selective, sustained deal activity suggests that high-quality assets can still attract strong strategic and financial interest.

Europe may not be leading the global recovery, but if this momentum continues, it could become one of the first regions where sponsors consistently turn portfolio value into realized returns.

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MACROVIEW

Stablecoins and the Extension of the Dollar’s Global Reach

Stablecoins are rapidly evolving from a crypto-market tool into a meaningful component of the international monetary system. With the market now exceeding $300 billion—and nearly all stablecoins denominated in U.S. dollars—the technology is reinforcing dollar dominance rather than challenging it.

Tether and USDC alone account for more than 90% of the market, reflecting the decisive shift toward reserve-backed models supported by cash and short-term U.S. Treasury securities. This structure gives stablecoins a dual role: they operate as blockchain-native settlement instruments while also expanding global demand for dollar assets.

The impact is especially important in emerging markets. In countries facing high inflation, exchange-rate volatility, or capital controls, stablecoins provide households and businesses with direct access to digital dollars without requiring a U.S. bank account. That can preserve savings and improve cross-border payments, but it can also accelerate “stealth dollarization,” weaken monetary-policy transmission, and make capital-flow management more difficult.

The central macroeconomic question is no longer whether stablecoins will grow, but whether governments can capture their efficiency benefits without surrendering financial stability and monetary sovereignty. (More)