NextWave Private Equity

In Q1 2025, private equity firms saw a 45% rise in deal volume compared to the previous year. However, rising trade tensions are creating caution among investors. Many firms may limit capital deployment in the coming months, yet a higher-than-average risk tolerance indicates readiness to seize new opportunities. Firms are focusing on operational improvements within their portfolios and exploring sectors like aerospace and defense. Additionally, the return of corporate acquirers has boosted exit activity, reflecting a dynamic shift in the private equity landscape amid ongoing uncertainty. Visit https://www.ey.com/pepulse to view this quarter's summary.

Matt Breitfelder, Partner, and Global Head of Human Capital at Apollo in conversation with Bridget Walsh, EY Global Head of Private Equity. In this episode Matt shares his insights about the role of talent and optimising personal performance in the asset management industry. The views of third parties set out in this podcast are not necessarily the views of the global EY organization or its member firms. Moreover, they should be seen in the context of the time they were made.

Angelo Rufino, Partner and Head of Special Situations in North America and Head of Corporate Special Situations in Europe for Bain Capital, joins Bridget Walsh, EY Global Head of Private Equity. In this episode Angelo shares his insights on the differentiated opportunities for Special Situations investing. 17 mins. The views of third parties set out in this podcast are not necessarily the views of the global EY organization or its member firms. Moreover, they should be seen in the context of the time they were made.

Private equity enters 2025 with strong expectations amid favorable market conditions. In 2024, PE firms announced US$565b in deals, a 25% increase in value and 20% in volume from the previous year. Confidence is high, with 73% of GPs expecting increased deployment activity. Factors driving this optimism include narrowing valuation gaps, increased asset availability, and improved macro visibility. Exit activity is also expected to rise, driven by secondary buyouts. Additionally, GPs anticipate a surge in IPOs and a continued focus on AI and private markets buildout. Visit https://www.ey.com/pepulse to view this quarter's summary. Key takeaways: PE firms enter 2025 with US$1.4t in dry powder; 73% of GPs expect increased deployment activity in the next six months. Supply chain issues ranked as a top concern, with 70% of GPs working with portfolio companies to assess these issues in light of proposed tariffs. GPs' top expectation for this year is an increase in IPOs, with companies in strong market positions well placed to go public.

The private equity (PE) market is bouncing back, with deal activity picking up thanks to clearer economic indicators and better financing options. Despite this dealmaking boost, exits are slower, posing challenges for investors and firms. The tech sector stands out, attracting significant PE interest due to favorable financing conditions, signaling a trend of increased tech-focused deals ahead.  Visit https://www.ey.com/pepulse to view this quarter's summary.    Key takeaways: PE deals experience a significant surge in 2024, especially in the second and third quarters, buoyed by growing market confidence, clearer economic indicators and improved financing conditions. The technology sector, fueled by advancements in artificial intelligence (AI) and cloud computing, leads growth, with a notable increase in demand for high-quality assets indicating a market primed for capital investment. Exit strategies encounter headwinds, with a downturn in value and sluggish IPO activity, prompting a shift in investor focus toward cash flow, while PE firms continue to pursue disciplined, strategic acquisitions and business expansion.

In this episode on the NextWave Private Equity Podcast, Matt Brown Founder, CEO and Chairman of CAIS, joins Bridget Walsh to discuss how technology can unlock private wealth for private equity.   Technology is revolutionizing the private wealth market, enabling independent advisors to access alternative investments and compete with larger firms. Founder, CEO and Chairman of CAIS, Matt Brown, shares his platform's role in streamlining the investment process and the importance of education in advisor empowerment. Listen to the discussion for insights about the future of private equity and the growing opportunities for asset managers in a market ripe for change.     Key takeaways:  CAIS is leveling the playing field for independent advisors, granting them entry into the realm of alternative investments with cutting-edge technology.  By simplifying the investment lifecycle, CAIS enhances accessibility and operational ease, broadening the scope for high-caliber alternative investment opportunities. Envisioning a shift in wealth management, CAIS is at the forefront, championing technology to foster a more inclusive and diversified investment landscape. 

Pete Witte, EY Global Private Equity Lead Analyst, explores the key themes and market dynamics from Q2 2024 that are top of mind for Private Equity (PE) investors. PE Pulse is a quarterly report and corresponding podcast miniseries that provides analysis and insights on private equity market activity and trends. Visit https://www.ey.com/pepulse to view this quarter's summary.  In this episode, Pete Witte, EY Global Private Equity Lead Analyst, explores into the market environment for private equity, offering a comprehensive analysis of the current trends, deals, and the overall financing landscape.

Pete Witte, EY Global Private Equity Lead Analyst, explores the key themes and market dynamics from Q1 2024 that are top of mind for Private Equity (PE) investors. PE Pulse is a quarterly report and corresponding podcast miniseries that provides analysis and insights on private equity market activity and trends. Visit https://www.ey.com/pepulse to view this quarter's summary.  In this episode, we will provide a quick rundown on some of the trends and the themes that we're seeing in the market with respect to deals, the credit environment and how the macro situation is going to impact dealmaking over the course of the year.

In this episode, Avi Kalichstein, co-founder, and CEO of investment firm Hunter Point Capital, joins our host Bridget Walsh, EY Global Private Equity Leader, to discuss the growing market for GP stakes.

In this episode, Flor Kassai, Head of the Buyout Fund at Inflexion Private Equity Partners, a leading mid-market private equity fund, joins our host Bridget Walsh, EY Global Private Equity Leader, to discuss the evolving middle market landscape.

 In this episode, Oi-Yee Choo, CEO of ADDX, joins our host Bridget Walsh, EY Global Private Equity Leader, to discuss tokenization and democratization of private markets.

Pete Witte, EY Global Private Equity Lead Analyst, explores the key themes and market dynamics from 4Q 2023 that are top of mind for Private Equity (PE) investors. PE Pulse is a quarterly report and corresponding podcast miniseries that provides analysis and insights on private equity market activity and trends. Visit https://www.ey.com/pepulse to view this quarter's summary.  In this episode, we will provide a quick rundown of how last year shook out and some of the things that we expect for 2024. All the important themes and trends and how we think the macro environment is going to impact private equity in terms of deployment, fundraising, financing exits and some of the longer-term impacts as well. And we'll also take a look at some really interesting survey data that we've been collecting over the last few weeks.   

Software's been a powerful theme for PE investors for much of the last decade, representing between one-quarter and one-third of total PE deployment. David Humphrey, Partner in the Technology, Media & Telecommunications Vertical and Co-Head of Bain Capital's North American Private Equity business, discusses the philosophy into investing in the tech space.

Pete Witte, EY Global Private Equity Lead Analyst, explores the key themes and market dynamics from 3Q 2023 that are top of mind for Private Equity (PE) investors. PE Pulse is a quarterly report and corresponding podcast miniseries that provides analysis and insights on private equity market activity and trends. Visit https://www.ey.com/pepulse to view this quarter's summary. In this episode, Pete reviews PE deal activity, which continues to accelerate while visibility into interest rate trajectories and macro volatility begins to recede. 

Pete Witte, EY Global Private Equity Lead Analyst, explores the key themes and market dynamics from 2Q 2023 that are top of mind for Private Equity (PE) investors. PE Pulse is a quarterly report and corresponding podcast miniseries that provides analysis and insights on private equity market activity and trends. Visit https://www.ey.com/pepulse to view this quarter's summary. In this episode, Pete reviews the recent PE landscape and modest uptick on European resurgence.

Pete Witte, EY Global Private Equity Lead Analyst, explores the key themes and market dynamics from 1Q 2023 that are top of mind for Private Equity (PE) investors. PE Pulse is a quarterly report and corresponding podcast miniseries that provides analysis and insights on private equity market activity and trends. Visit https://www.ey.com/pepulse to view this quarter's summary.  In this episode, we will provide a quick rundown of what we're seeing in the private equity space. All the important themes and trends, and how today's macro environment is impacting PE – in terms of deployment, fundraising, financing, and some of the longer-term impacts. 

In this episode of the NextWave Private Equity podcast, Bridget Walsh, EY Global Private Equity Leader, will be discussing the entrance of retail investors in the private equity market with Jenny Johnson, CEO of Franklin Templeton.

In this episode, Mark Benedetti, Co-Head of Ardian US, joins our host Bridget Walsh, EY Global Private Equity Leader, to discuss the growing role of secondaries in the private equity market.

Pete Witte, EY Global Private Equity Lead Analyst, explores the key themes and market dynamics from 4Q 2022 that are top of mind for PE investors. PE Pulse is a quarterly report and corresponding podcast miniseries that provides analysis and insights on private equity market activity and trends. Visit https://www.ey.com/pepulse to view this quarter's summary.  2022 was an incredibly dynamic year for the private equity (PE) industry, characterized by growth, innovation, creativity and the trademark resiliency that has defined the industry since its inception. The first half of the year saw a deal environment that carried over much of the momentum from 2021's record levels of activity and the second half of the year saw PE firms become increasingly cautious in the face of rising inflationary pressures, the macro impacts of the war in Ukraine, a widening valuations gap, and widespread dislocation in the financing markets that restricted access to PE's traditional sources of financing.

Pete Witte, EY Global Private Equity Lead Analyst, explores the key themes and market dynamics from 3Q 2022 that are top of mind for PE investors. PE Pulse is a quarterly report and corresponding podcast miniseries that provides analysis and insights on private equity market activity and trends. Visit https://www.ey.com/pepulse to view this quarter's summary.  The PE sector continued to experience a number of cyclical headwinds in the third quarter, as rising interest rates, growing concerns of a recession, deteriorating macro sentiment and challenges in the financing markets all conspired to limit firms' ability to execute new transactions. At the same time, however, firms continue to position themselves for long-term strategic growth, with new product launches and innovations, and by tapping new sources of capital that will allow the industry to continue to grow.

Greg Schooley, EY-Parthenon US Value Creation Leader, joins Winna Brown to discuss what tasks PE is outsourcing across business functions such as finance, IT, HR and customer service to create value. The path to successful value creation in private equity (PE) today goes beyond typical levers such as G&A cost-cutting, sales force effectiveness and strategic sourcing. It's about an approach that leverages digital tools including automation, strategic outsourcing and advanced analytics. Going forward, PE-owned companies of all sizes may need to look at outsourcing as a way to access cutting-edge technologies and capabilities that can lead to revenue growth opportunities, in addition to reducing costs.

Pam Jackson, CEO of Level20, joins Winna Brown to reveal how mentorship programs can help women build long-term careers in PE.  According to a report that EY teams recently published on diversity, equity and inclusiveness (DEI), the private equity industry's ability to meet stakeholder demands, access capital, win deals and compete for talent is increasingly contingent on progress against DEI metrics. Talent management has become the number two strategic priority across PE firms of all sizes, second only to asset growth. DEI initiatives are now proliferating in private equity as the industry begins to address how its culture has historically impeded diversity. Level20 is a non-profit organization based in the UK that is dedicated to improving gender diversity in the European PE industry and specifically in senior leadership roles at PE firms.  Read “Can PE win deals if it doesn't deal with DEI?”: https://www.ey.com/en_gl/private-equity/can-pe-win-deals-if-it-doesn-t-deal-with-dei Calculate how long it will take to achieve your diversity goals: https://kenaninstitute.unc.edu/diversity-integration-model/ Ten ways male PE leaders can support and mentor their female colleagues: Serve as role models and mentors Engage with colleagues who are different from yourself Encourage women to realize their value Promote stories of inspiring women Engage in small interventions Embody inclusive leadership Give cultural shifts time to come to fruition Build a diverse talent pipeline from the bottom over time Recognize that recruiting senior women is not a “quick win” Model how long it will take to achieve your diversity goals with the EY Diversity Integration Model

In this episode, Laura Grattan, Managing Director at Crosspoint Capital, and Jeff Vogel, Head of the Software Strategy Group at EY-Parthenon, join Winna Brown to explore how PE firms can position themselves to win tech deals in today's highly competitive market. Contact Laura: lgrattan@crosspointcapital.com Contact Jeff: jeffrey.vogel@parthenon.ey.com According to the latest EY PE Pulse report, 2021 was the year of the tech deal: 30% of total capital deployed last year was allocated to technology companies. The technology sector, once just another industry vertical, now permeates every sector, claiming an ever-increasing share of deals as more companies differentiate themselves based on their technology regardless of the industry in which they sit or serve. Crosspoint Capital focuses on the cybersecurity, privacy and infrastructure software sectors. PE firms that choose a niche specialization in the tech sector can bring deep sector expertise that translates to value creation for their portfolio companies. In an increasingly competitive tech environment, PE firms that focus on a highly targeted category of assets can find themselves in a differentiated position. They are able to quickly discern where to spend time, recognize the opportunities and limitations of an asset, and identify patterns indicative of future success. Three characteristics of today's tech deal environment include: Increasing presence of and need for club deals Increasing speed at which deals are clearing Developing deal theses early

To the NextWave Private Equity audience: Since February of 2020, just before the covid-19 pandemic uprooted all of our lives, the EY global private equity team has turned to this podcast series to discuss the topics and insights that are top-of-mind for our audience of PE executives and practitioners. From the bottom of my heart, thank you! For listening, for giving us your time and for trusting us to deliver best-in-class perspectives. Over the next couple of months, we will re-publish some of our most downloaded and talked-about episodes about tech deals, DEI and other timely topics. These are some of our best episodes, and when you listen, you will surely understand why. Thanks for tuning in! Winna Brown, EY Americas ESG Private Equity Leader winna.brown@ey.com 

Maha Eltobgy, Chief Sustainability Officer and Managing Director at Brightstar Capital Partners, joins Winna Brown to explore how operating executives can effectively communicate the value prop of ESG at the portco level. ESG is top of mind for PE executives right now. According to the 2022 EY Global Private Equity survey, ESG is one of the top four strategic priorities listed by PE firms. 42% of the largest fund managers seriously consider ESG in their decision-making process, while a further 39% say they consider ESG issues seriously in certain risk areas. ESG is a top priority for firms, but effectively implementing ESG strategy and principles across the portfolio remains challenging. Five ways PE can navigate the implementation of ESG strategy and principles across the portfolio include: Win trust of management teams Start with employee retention and engagement Meet the portfolio company where they are in their journey Demonstrate how ESG values translate to business value Translate ESG principles into tangible, actionable initiatives

Pete Witte, EY Global Private Equity Lead Analyst, explores the key themes and market dynamics from 2Q 2022 that are top of mind for PE investors. PE Pulse is a quarterly report and corresponding podcast miniseries that provides analysis and insights on private equity market activity and trends. Visit https://www.ey.com/pepulse to view this quarter's summary.  PE firms will continue to remain active as they seek to continue to deploy more than US$1.4t in dry powder available for new deals. While market volatility, inflationary pressures and rising interest rates are combining to make the investment landscape far more challenging than a year ago, in many instances, PE firms will look to new strategies and investment themes that provide increased resilience against a macro backdrop for which few modern playbooks exist.   

Famke Krumbmüller, EY EMEIA Leader, Global Geostrategic Business Group, joins Winna Brown to discuss how shifts in geopolitical power will affect growth and investment opportunities. As a result of the war in Ukraine, three major power blocs are emerging, and it has become critical for companies to understand the allies of the markets in which they are invested. Developed markets are leading one bloc, with the EU and the US having reached new levels of cooperation. Relatedly, the North Atlantic Treaty Organization (NATO) has been reinvigorated. Russia is leading a small bloc of countries, including several autocracies. A significant number of emerging markets, including China and India, are not aligning with either of these blocs, preferring to pursue a more neutral or transactional stance. Several strategic sectors (i.e., farming and medical equipment, agriculture and food commodities, and critical infrastructure) have come into focus due to their relevance to national security and economic growth and the resulting geostrategic competition between these great powers in those strategic sectors. Cross-border deals have decreased as a share of global M&A in favor of more regional and intra-area deals. In this emerging multipolar world, companies are likely to see increased government intervention in their supply chains, limitations on or rejections of cross-border investments, export controls, restrictive trade measures and greater regulatory scrutiny. Three priorities companies can incorporate to adjust to the new geopolitical environment include: Assess current and future political risks annually. Establish a cross-functional geostrategic team. Refine the company strategy to match new geopolitical realities.  

Elizabeth Seeger, Managing Director of Sustainable Investing at KKR, joins Winna Brown to discuss why KKR views ESG as a business opportunity that both creates and protects value over time. ESG has skyrocketed to the top of many PE firms' list of strategic priorities in the past couple of years. PE firms that may have historically viewed ESG as a “nice to have” or a “check the box” exercise, are now increasingly considering ESG to be a business issue that is embedded in the business, not peripheral to it. PE firms such as KKR that were early adopters of and believers in ESG are now in a position not only to lead the charge to net zero, but to share their learnings with other firms that may be earlier on their ESG journey. At KKR, ESG is viewed as a way to both protect and enhance value over time and is managed alongside other business issues. KKR is focused on climate change, data and integrating ESG issues and subject matter expertise into the investment process. The firm views ESG data not as a way to score potential targets, but to identify a pathway to managing ESG-related risk sover the duration of the hold period. Lastly, KKR has identified three measurable ESG pillars across the portfolio regardless of industry: climate, human capital and data responsibility (cybersecurity and data privacy). PE has an interesting role to play in the transition to net zero, and firms are likely to focus on 6 key areas: Creating and protecting value through ESG Building and deploying teams of resources and expertise Integrating climate and ESG considerations into investment processes Launching standalone ESG or impact funds Spotlighting portfolio companies that are addressing critical environmental and social challenges Collaborating and knowledge sharing to share solutions and best practices

Karim Anani, EY Americas Financial Accounting and Advisory Services Transactions Leader, and Mark Schwartz, Head of IPO and SPAC Capital Markets Advisory, join Winna Brown to explore why SPACs remain highly relevant despite market volatility and regulatory headwinds. Contact Karim: karim.anani@ey.com  Contact Mark: mark.schwartz1@ey.com  In 2021, more than 40% of new public companies listed through mergers with SPACs. While SPACs have been around for decades, the boom of the last few years has dominated its narrative in the marketplace. Today, there are hundreds of SPACs seeking “transactable” targets that face potential liquidation in the next year or so if deals aren't made.  Against this backdrop, SPAC sponsors are operating in an extremely choppy market environment for SPACs and other new issues, and recently proposed SEC regulation has increased uncertainty in an already uneasy deal-making environment. Today's episode explores why SPACs remain highly relevant in EY dialogue with operating companies and their backers despite the market and regulatory headwinds. What is in store for SPACs over the next one to two years and beyond? Recent innovation and complexity in SPAC mergers Evolving negotiation dynamics in recent dealmaking processes Ongoing evolution of what makes an attractive operating company for a SPAC merger Transforming and adapting of SPACs in the face of the current challenges

[Episode originally published 12/16/2021] Tyler Brewster, Senior Director at EY-Parthenon, joins Winna Brown to reveal the drivers behind PE's increasing presence in pro sports and explore both the opportunities and risks for investors. Contact Tyler: tyler.brewster@parthenon.ey.com  Private equity (PE) is now undeniably present in the world of professional sports. According to Pitchbook, over the past 18 months, PE firms have taken on passive stakes in professional sports franchises and leagues after the NBA, MLB and Major League Soccer loosened ownership rules to include institutional investors. In addition, funds focused on sports have begun to emerge. According to Pitchbook, the total value of PE investments in sports teams and leagues has doubled in the past three years from US$3.3b in 2018 to US$7.1b in 2021. This episode dives into the current drivers, opportunities and risks shaping PE's presence in the sports industry. We discuss why this is an attractive industry for investors, the opportunities for continued growth such as media rights, asset diversification, and digital transformation, as well as the reputational risks and considerations for PE as it steps into the sports industry spotlight.

Greg Daco, EY-Parthenon Chief Economist, joins Winna Brown to discuss how macroeconomic factors such as inflation, monetary policy and the labor shortage will impact PE investment decisions and theses. To discover more PE perspectives and insights, visit ey.com/privateequity. These seven gauges will indicate how much PE activity will take place in the coming year: The positioning of a company in its sector Whether the sector is positively or negatively impacted by inflation How much pricing power a company has A company's ability to pass on higher input and labor costs The price at which a company is acquired considering the higher cost of credit due to higher interest rates How resilient a company is in this economic environment The long-term value potential of a company and the type of value it brings

Pete Witte, EY Global Private Equity Lead Analyst, explores the key themes and market dynamics from 1Q 2022 that are top of mind for PE investors. PE Pulse is a quarterly report and corresponding podcast miniseries that provides analysis and insights on private equity market activity and trends. Visit https://www.ey.com/pepulse to view this quarter's summary and infographic.   Five takeaways from 1Q 2022: The macroeconomic environment is top of mind for investors as uncertainty impacts growth, inflation and interest rates PE deal activity decreases 27% from 1Q 2021: despite a softening in activity from the breakneck pace of last year, this level of activity is still quite robust Geopolitical uncertainty: PE firms are using the same playbook they used during the COVID-19 pandemic to manage the impact from the war in Ukraine PE exit activity decreases 60% by value from 1Q21: PE will continue to do what they have always done, which is execute on strategy and look to exit when conditions are more amenable Secondaries market reaches new heights: GP-led deals are key drivers of this trend, as they providing optionality for LPs    

Greg Schooley, EY-Parthenon US Value Creation Leader, joins Winna Brown to discuss what tasks PE is outsourcing across business functions such as finance, IT, HR and customer service to create value. The path to successful value creation in private equity (PE) today goes beyond typical levers such as G&A cost-cutting, sales force effectiveness and strategic sourcing. It's about an approach that leverages digital tools including automation, strategic outsourcing and advanced analytics. Going forward, PE-owned companies of all sizes may need to look at outsourcing as a way to access cutting-edge technologies and capabilities that can lead to revenue growth opportunities, in addition to reducing costs.

Danny Warshay, Executive Director of the Nelson Center for Entrepreneurship at Brown University, explores how the “See, Solve, Scale” entrepreneurial process can help PE investors screen potential investments. Partnering with a private equity (PE) firm has become especially attractive for founders of lower and middle market companies that aim for transformational, sustainable growth. As active and engaged investors, PE brings not only capital, but specialized industry expertise and experience, and generally a large network of professionals and operating resources. But to which entrepreneurs and founders is private capital flowing and what factors are influencing those investment decisions? Danny Warshay is the Executive Director of the Nelson Center for Entrepreneurship at Brown University in Providence, Rhode Island, and author of “See, Solve, Scale: How Anyone Can Turn an Unsolved Problem into a Breakthrough Success.” Danny asserts that much of the same “See, Solve, Scale” process that has empowered so many entrepreneurs can also be helpful to investors as a screen for potential investments. The episode also explores how the legacy culture, bias and ways of doing business in PE can shape investment decisions and cause investors to overlook promising opportunities and entrepreneurs. Entrepreneurs should keep three things in mind when seeking to raise private capital: Seek to fix problems that actually exist rather than be “a solution in search of a problem.” Having abundant resources can burden the entrepreneurial process, while scarce resources can actually be beneficial. Aspire for diversity among founders, management teams and investment teams because diverse teams are better positioned for success.

Pam Jackson, CEO of Level20, joins Winna Brown to reveal how mentorship programs can help women build long-term careers in PE.  According to a report that EY teams recently published on diversity, equity and inclusiveness (DEI), the private equity industry's ability to meet stakeholder demands, access capital, win deals and compete for talent is increasingly contingent on progress against DEI metrics. Talent management has become the number two strategic priority across PE firms of all sizes, second only to asset growth. DEI initiatives are now proliferating in private equity as the industry begins to address how its culture has historically impeded diversity. Level20 is a non-profit organization based in the UK that is dedicated to improving gender diversity in the European PE industry and specifically in senior leadership roles at PE firms.  Read “Can PE win deals if it doesn't deal with DEI?”: https://www.ey.com/en_gl/private-equity/can-pe-win-deals-if-it-doesn-t-deal-with-dei Calculate how long it will take to achieve your diversity goals: https://kenaninstitute.unc.edu/diversity-integration-model/ Ten ways male PE leaders can support and mentor their female colleagues: Serve as role models and mentors Engage with colleagues who are different from yourself Encourage women to realize their value Promote stories of inspiring women Engage in small interventions Embody inclusive leadership Give cultural shifts time to come to fruition Build a diverse talent pipeline from the bottom over time Recognize that recruiting senior women is not a “quick win” Model how long it will take to achieve your diversity goals with the EY Diversity Integration Model

In this episode, Laura Grattan, Managing Director at Crosspoint Capital, and Jeff Vogel, Head of the Software Strategy Group at EY-Parthenon, join Winna Brown to explore how PE firms can position themselves to win tech deals in today's highly competitive market. Contact Laura: lgrattan@crosspointcapital.com Contact Jeff: jeffrey.vogel@parthenon.ey.com According to the latest EY PE Pulse report, 2021 was the year of the tech deal: 30% of total capital deployed last year was allocated to technology companies. The technology sector, once just another industry vertical, now permeates every sector, claiming an ever-increasing share of deals as more companies differentiate themselves based on their technology regardless of the industry in which they sit or serve. Crosspoint Capital focuses on the cybersecurity, privacy and infrastructure software sectors. PE firms that choose a niche specialization in the tech sector can bring deep sector expertise that translates to value creation for their portfolio companies. In an increasingly competitive tech environment, PE firms that focus on a highly targeted category of assets can find themselves in a differentiated position. They are able to quickly discern where to spend time, recognize the opportunities and limitations of an asset, and identify patterns indicative of future success. Three characteristics of today's tech deal environment include: Increasing presence of and need for club deals Increasing speed at which deals are clearing Developing deal theses early

Pete Witte, EY Global Private Equity Lead Analyst, explores the key themes and market dynamics from 4Q 2021 that are top of mind for PE investors. PE Pulse is a quarterly report and corresponding podcast miniseries that provides analysis and insights on private equity market activity and trends. Visit https://www.ey.com/pepulse to view this quarter's summary and infographic.   Five takeaways from 4Q 2021: 2021 was a year for the record books for private equity (PE) firms, with investment activity surpassing the trillion-dollar mark for the first time. 30% of the total capital deployed in 2021 was allocated to technology companies, followed by firms in the consumer space, which saw 24% of aggregate deals by value. Growth equity funds raised US$102b throughout the year, up 53% from 2020 and up 74% from the average raised for growth funds over five years prior. PE exits saw record activity levels in 2021, with value and volume seeing increases of 107% and 56%, respectively. If 2021 will be remembered for anything, it will be the way that ESG and issues of sustainability catapulted to the top of PE firms' agendas, driven by broad recognition that it's the right thing to do and pressure from the whole gamut of PE's stakeholder groups.

In this episode, Nic Humphries, Senior Partner and Executive Chairman of Hg, joins Winna Brown to explore how Hg's philosophy of curiosity and experimentation has enabled it to become one of the most active technology investors in the world. Contact Nic: Hg@hgcapital.com  As an early adopter of artificial intelligence (AI), machine learning and analytics, Hg has embraced an investment and organizational philosophy of curiosity and experimentation that has enabled it to become one of the most active technology investors in the world.   In this episode, Winna and Nic explore: Why AI and machine learning are a lead indicator and differentiator of Hg's market position How AI has increased the sophistication of Hg's origination process Where AI has made transformative impacts in the portfolio Why AI has caused job creation and retention rather than attrition How AI will drive the investment landscape moving forward Why people skills will remain vital in PE despite the increasing presence of AI and data analytics 4 areas where AI can create and unlock value in PE include: Churn propensity modeling Upsell and cross-sell modeling Target identification and origination Predictive analytics across the portfolio

In this episode, Tyler Brewster, Senior Director at EY-Parthenon, joins Winna Brown to reveal the drivers behind PE's increasing presence in pro sports and explore both the opportunities and risks for investors. Contact Tyler: tyler.brewster@parthenon.ey.com Private equity (PE) is now undeniably present in the world of professional sports. According to Pitchbook, over the past 18 months, PE firms have taken on passive stakes in professional sports franchises and leagues after the NBA, MLB and Major League Soccer loosened ownership rules to include institutional investors. In addition, funds focused on sports have begun to emerge. The total value of PE investments in sports teams and leagues has doubled in the past three years from US$3.3b in 2018 to US$7.1b in 2021. This episode dives into the current drivers, opportunities and risks shaping PE's presence in the sports industry. We discuss why this is an attractive industry for investors, the opportunities for continued growth such as media rights, asset diversification, and digital transformation, as well as the reputational risks and considerations for PE as it steps into the sports industry spotlight.

Tricia Glynn, a Partner at Advent International, shares best practices from Advent's renowned DEI program and discusses how private equity (PE) firms can build an inclusive culture and incorporate diversity, equity and inclusion (DEI) into their value creation thesis. Tricia has been a PE investor for over 20 years and currently serves on boards such as Lululemon and Olaplex, and co-leads Advent's North American Retail, Consumer and Leisure sector team.  To read EY's new report on DEI in PE, visit ey.com/privateequity. DEI is not PE's strength. According to Preqin's Women in Alternative Assets report, only one-fifth of industry employees and 12.2% of senior roles were female in 2020. The situation for underrepresented minorities in the industry is dismal, with only 2% Hispanic and 1% Black venture capital (VC) investors in the US (Gompers and Kovvali, 2018). As of December 2020, nearly 50 buyout firms and investors had signed a global initiative launched by the Institutional Limited Partners Association (ILPA) to improve diversity among their ranks; a substantive and public step in the right direction, but as Tricia says: "The industry has a long way to go.” A PE talent strategy must incorporate a proactive approach to DEI with a strong tone set “from the top,” ensuring diverse employees feel wanted, valued and sponsored. Incorporating a comprehensive DEI strategy addresses a firm's commitment to elevating society while expanding its talent pool and creating new perspectives in investing. Advent views DEI as foundational to its business model, competitive positioning and talent strategy so it can be both the chosen buyer and chosen employer. Five things PE can do to build DEI companies and cultures include: Find, engage and learn from DEI experts in your network. Hire experts (i.e., advisors, academic researchers) who understand your industry and know how to drive DEI culture. Track data to identify your biggest problems, determine where you want to drive change and hold yourself accountable. Give permission to speak openly: fear of “saying the wrong thing” holds leaders back from engaging in DEI so allowing well-intentioned people to learn in real time is important. Hold everyone in the organization accountable.

Entrepreneurs and companies seeking investment may find a family office (FO) a compelling alternative to private equity (PE). According to Preqin, family office deals currently represent 2.5% of total M&A deals, a small share but one that has been steadily increasing since the great financial crisis. The Economist estimates family offices manage assets worth an estimated US$4 trillion, with individual offices averaging $500 million to $1 billion in AUM according to Forbes. Our guest is Katherine Hill Ritchie, Director and Board Member of Nottingham Spirk, a 50-year-old innovation firm with a family office. Katherine has 18 years of finance, investing and family office experience and started her own firm working with family offices and alternative investment funds and companies. Katherine is also an Angel Investor and advisor who supports and invests in female and diverse founded venture capital funds and companies and is on the board of several organizations. She has spoken at over 100 global investment conferences, lectured at universities, and was recently awarded a lifetime achievement award for her family office work. Contact Katherine: KHillRitchie@nottinghamspirk.com 8 things companies should know about FOs: FOs can and do compete with PE for direct investments. FO fund structure, investment thesis, acquisition requirements, portfolio and shareholder mix are frequently opaque. FOs have flexibility to change their focus. FOs are not beholden to a 7-10-year exit timeline. IPO is not always the exit strategy for a FO. FOs don't face the same regulatory requirements as funds. FOs may or may not care about ESG requirements for their investments. Companies must build relationships with FOs to ensure alignment of objectives.

Pete Witte, EY Global Private Equity Lead Analyst, explores the key themes and market dynamics from 3Q 2021 that are top of mind for PE investors. PE Pulse is a quarterly report and corresponding podcast miniseries that provides analysis and insights on private equity market activity and trends. Visit https://www.ey.com/pepulse to view this quarter's summary and infographic.   Five takeaways from 3Q 2021: Global M&A markets are on their way to a record year, with private equity (PE) in the driver's seat. PE as an asset class continues to grow, with retail and insurance markets positioned to drive future asset growth. PE firms' continued focus on the technology sector is driven by rising needs for security, automation and the digital transformation of critical organizational functions. Health care is garnering significant interest from PE due to favorable macro tailwinds, long-term growth expectations and an anticipated increase in consumer spending. Deal activity is not limited to large-scale deals; middle market deployment is the highest since the global financial crisis.  

Hanne Thornam, EY Norway Head of Climate Change and Sustainability Services, joins Winna Brown to share why PE is in a unique position to lead our transition to a low-carbon, circular economy. Contact Hanne: hanne.thornam@no.ey.com As private equity (PE) firms focus on ESG, they must also pivot to a long-term, forward-thinking mindset. For an industry accustomed to using historical data to project the next four to five years, this is no simple task; however, it is an existential one. Climate change will mean our world looks very different in a decade regardless of the action we take (or don't take), and PE firms are uniquely equipped to lead this mission, should they choose to accept it. ESG topics have both financial and commercial relevance, and PE must define and track KPIs that are specific to each portfolio company. It is no longer optional to engage in the ESG conversation, as a lack of awareness is an inherent business risk. Two overarching climate scenarios are possible, both of which require comprehensive adaptation and imagination: A warming scenario in which rising temperatures impact access to raw materials, stoke political stability and disrupt value chains A transition scenario characterized by increasing regulation, bans and changes in technology and consumer preferences Six ways PE firms can shift their mindset to increase their climate competence and confidence: Champion a long-term, forward-looking perspective Cross-pollinate climate data across workstreams Incorporate climate scenarios as core data points Engage diverse perspectives Embrace complexity and curiosity Verify competence on climate and environmental risks in investment teams

Political risk is creating challenges and opportunities for global organizations, including private equity (PE) firms and investors who are increasingly exploring cross-border deals as valuations soar across the US and Europe. On a previous episode, we talked about why PE firms must embed a geostrategy so they are able to recognize unique opportunities and use that strategy to inform their investment decisions. Today, we dive into three specific areas of geopolitical risk that are especially impactful for and relevant to private equity funds right now: COVID-19 pandemic: increased tension and competition between big regional powers will lead to an environment in which PE must carefully consider and anticipate the implications for cross-border deals. Tech sector: governments and regulators will have a massive influence on the tech sector in the coming years and it will create both political risks and opportunities for investors. Climate change: increasingly active governments and regulators will create a patchwork of environmental legislation which will make it much more difficult to operate across markets. Contact Famke: Famke.Krumbmuller@fr.ey.com

Luke Pais, EY ASEAN Private Equity Leader, explores why Southeast Asia is a vibrant region for PE investors who adeptly navigate local dynamics.   Contact Luke: luke.pais@sg.ey.com According to the Preqin Investor Survey conducted in November 2020, Southeast Asia is among the top three emerging markets ideal for private equity (PE) and venture capital (VC) investment in the next 12 months. The region is welcoming to foreign capital, with entrepreneurs and family conglomerates actively seeking capital and focusing on succession planning. PE's field of play in the region is dynamic. Because the region demands quality infrastructure to support its burgeoning and young population, the field of play includes specialist funds focused on real estate, infrastructure, renewable energy and digital. The technology sector is especially vibrant and impact funds are becoming more prevalent. While credit has historically been a domain of banks, PE credit products are emerging in the region given balance sheets have become healthier since the great financial crisis of 2008. Lastly, family conglomerates in the region often function like PE funds and compete against PE funds in the deal space. PE has historically done well in the region by carefully selecting the right companies and preparing them to expand internationally. As a result, PE-backed companies have been attractive to multinationals and trade sales to strategic investors in the US, China, Europe and Japan have been the dominant exit thesis in the region. Learning outcomes: PE should consider localizing their strategy to include a regional headquarters in Singapore in combination with strong market coverage in various other Southeast Asian countries. PE firms must be clear about the value they bring to the table in a competitive deal environment in which discussions have shifted from valuation to value proposition and value creation. Successful PE funds have built local relationships over time as companies seek partnerships rooted in shared aspirations. ESG is increasingly important during due diligence, as access to capital depends on achieving ESG benchmarks and commitments.

Cybersecurity professionals John Nugent, Vice President at Apax and Paul Harragan, Associate Partner at EY-Parthenon, explore how PE can manage cybersecurity risk and why it should be viewed as a value creation lever rather than a cost. Contact Paul Harragan: paul.harragan@parthenon.ey.com  Cyberattacks happen constantly, and companies display a wide range of preparedness. Private equity (PE), like any other industry, is not immune from this growing threat. 1H2021 saw increase in ransomware attacks in PE portfolio companies, which is especially troublesome for an industry that has traditionally taken a less rigorous approach to information security and cyber defense. PE has, however, begun to embrace the necessary investments needed to understand their intrinsic risk, prepare for the inevitable breach and respond quickly. While it is inherently difficult to gauge or predict the monetary cost of a breach, PE must consider that a breach can degrade an asset's sale price or, in rare cases, be a “dealbreaker” altogether. In addition to potential impact on transactions, skyrocketing insurance costs render the cost of negligence far greater than the cost of investing in a comprehensive cybersecurity strategy. Cybersecurity due diligence is increasingly becoming industry standard and should focus on past, present and future. For PE, future risk is an especially critical consideration since capital deployment can dramatically change the threat landscape of an asset. Five gold standard cybersecurity practices for PE include: Understand your threat landscape Identify what a hacker would find valuable and attractive about your company Identify critical business functions and adopt procedures to monitor, defend and preserve functionality in the event of an attack Inform security leadership of the technology strategy and broader business plan so they can anticipate changes to the attack surface Understand how new technology can generate new attack vectors and impact your threat landscape

Pete Witte, EY Global Private Equity Lead Analyst, explores the key themes and market dynamics from 2Q 2021 that are top of mind for PE investors. The PE Pulse is a quarterly report and corresponding podcast miniseries that provides analysis and insights on private equity market activity and trends. Visit https://www.ey.com/pepulse to view the summary and infographic.   5 takeaways from 2Q 2021: Exit activity via M&A and IPO are seeing record levels of activity, which is impacting the entire PE life cycle, including fundraising. Fundraising is picking up as demand from investors strengthens and funds start to close in earnest once again. Deal activity and deal volume are on track to comprise the most active half-year on record. Deal sizes are increasing due to increasing post-pandemic certainty and the accumulation of dry powder. Club deals are increasing in prevalence for large-scale deals.

Lindsey Kiely and Bhakti Nagalla of the EY-Parthenon Consumer Industries and Private Equity practices join Winna Brown to explore the consumer product categories, behaviors and trends investors should keep an eye on. Contact Lindsey: lindsey.kiely1@parthenon.ey.com Contact Bhakti: bhakti.nagalla@parthenon.ey.com  The consumer products and retail sectors have certainly been ones to watch. The COVID-19 pandemic both accelerated existing trends and forced the industry to accommodate novel consumer need states and demand shifts. Evaluating the sustainability of growth in these categories has become a key part of the diligence process as investors struggle to predict future consumer demand. In today's competitive deal environment, investors are seeking proprietary deals or early LOI more aggressively and are also pivoting to industries that support consumer goods and services (i.e. contract manufacturing, logistics, technology).   Consumer behaviors have shifted as they spend more time researching products online, increasingly favor masstige price points and demand next-level experiences from brands and retailers both online and offline. These shifts are causing investors to more heavily scrutinize a brand's online presence, pricing model and cost models. Interesting categories for investors to watch include: Consumer health Pet health Home products In-home entertainment and hobbies Online retail Supporting industries

Greg Brown, Executive Director at the Institute for Private Capital and Finance Professor at the University of North Carolina (UNC) Kenan-Flagler Business School, joins Winna Brown to discuss what the Institute's academic research says about PE's performance and the role private capital plays in the global economy. To get in touch with Greg, email uncipc@kenan-flagler.unc.edu  The Institute for Private Capital (IPC) is a non-profit, multi-university research initiative that's housed at the University of North Carolina (UNC). Its mission is to improve public understanding of private capital's role in the global economy by providing unbiased and independent research, conducted by a network of academic affiliates, with support from private sector companies. There are more than 35 member institutions involved in IPC – EY is one such institution – and these institutional supporters play a critical role in ensuring IPC research solves specific, practical issues affecting the PE industry. Two topics are consistently top of mind for PE investors: PE's role in the investment portfolio and the specific factors that predict future returns. IPC research explores an array of additional topics, and some of their findings include the following: Portfolios with private fund investments have superior returns on a risk-adjusted basis. There is a “risk-return pecking order” in which PE produces better risk-adjusted outcomes. The performance of individual deal partners is a reliable indicator of future fund performance. There are distinct determinants of performance at various stages of a fund's life cycle. PE makes meaningful and direct contributions to portfolio company operations. After PE enters a new market, there is a positive spillover to the broader economy in the form of an overall productivity increase. Over the coming years, there are two major focus areas for research and discussion in the academic community regarding private equity: To more deeply understand how private assets fit into the broader portfolio management process To identify performance drivers at PE-backed portfolio companies and explore how this has changed over time

Jeff Vogel, EY-Parthenon US Managing Director and Head of the Software Strategy Group, joins Winna Brown to explore the complexities and key trends shaping the software deal landscape. Visit ey.com to read our latest private equity perspectives. The “software economy” is comprised of companies that sell or license software as well as software-enabled business services companies that differentiate themselves on the basis of their software. Because a software asset is especially complex to valuate and diligence, PE firms and the advisors who serve them have transformed their talent strategy to attract a wide spectrum of operational experts ranging from serial CTOs to young entrepreneurs. A passion for technology combined with partnering experienced executives with curious young talent helps teams remain agile and responsive to rapid change. A software asset is different from a traditional asset for three important reasons: Markets are amorphous and difficult to size. Revenue potential and gross margins are high; however, R&D expenditure is also high because the product is must constantly evolve to stay competitive. Technical debt, unlike traditional debt, is difficult to quantify and does not appear on a balance sheet, so a PE investor may unwittingly sign up for obligations requiring significant capex. Five trends shaping the PE/software deal landscape: Role of PE: PE is shaping the software landscape by providing access to capital and focusing on building companies. Long-term value: PE is increasingly prepared to hold software assets for longer and are therefore optimizing for LTV. Growth: high valuations require PE to underwrite for growth, not solely for cash flow. Hybrid deals: PE firms that were traditionally majority stakeholders are now considering minority stakes. PIPE deals: private investment in public equity (PIPE) deals are leading to cross-fertilization in management and strategy between public and privately held companies.

Tricia Glynn, a Partner at Advent International, shares best practices from Advent’s renowned DEI program and discusses how private equity (PE) firms can build an inclusive culture and incorporate diversity, equity and inclusion (DEI) into their value creation thesis. Tricia has been a PE investor for over 20 years and currently serves on boards such as Lululemon and Olaplex, and co-leads Advent’s North American Retail, Consumer and Leisure sector team.  For more information on Advent's DEI program, visit  https://www.adventinternational.com/about/diversity-and-inclusion/  DEI is not PE’s strength. According to Preqin’s Women in Alternative Assets report, only one-fifth of industry employees and 12.2% of senior roles were female in 2020. The situation for underrepresented minorities in the industry is dismal, with only 2% Hispanic and 1% Black venture capital (VC) investors in the US (Gompers and Kovvali, 2018). As of December 2020, nearly 50 buyout firms and investors had signed a global initiative launched by the Institutional Limited Partners Association (ILPA) to improve diversity among their ranks; a substantive and public step in the right direction, but as Tricia says: "The industry has a long way to go.” A PE talent strategy must incorporate a proactive approach to DEI with a strong tone set “from the top,” ensuring diverse employees feel wanted, valued and sponsored. Incorporating a comprehensive DEI strategy addresses a firm’s commitment to elevating society while expanding its talent pool and creating new perspectives in investing. Advent views DEI as foundational to its business model, competitive positioning and talent strategy so it can be both the chosen buyer and chosen employer. Five things PE can do to build DEI companies and cultures include: Find, engage and learn from DEI experts in your network. Hire experts (i.e., advisors, academic researchers) who understand your industry and know how to drive DEI culture. Track data to identify your biggest problems, determine where you want to drive change and hold yourself accountable. Give permission to speak openly: fear of “saying the wrong thing” holds leaders back from engaging in DEI so allowing well-intentioned people to learn in real time is important. Hold everyone in the organization accountable.