Last time, we looked at how private credit has been evolving from a complementary financing tool into something much more central to how deals are structured and portfolios are built.

This time, the conversation is changing.

It’s no longer just about growth, opportunity, or positioning within portfolios.
It’s about what happens when the model starts to come under pressure.

Because for the first time in years, private credit is being tested across several fronts at once: liquidity, credit quality, and investor behavior.

When “Patient Capital” Meets Real Withdrawals

Private credit has always been positioned as long-term, stable capital.

Investors commit money for years, and in return, they get predictable income and downside protection. That’s been the core promise. But recently, parts of the market have started to behave differently.

In particular, some of the more accessible private credit vehicles, especially business development companies (BDCs), have seen a sharp increase in investors asking for their money back. In response, several large managers have had to limit withdrawals to protect the structure of their funds.

Private credit assets are inherently illiquid, loans are negotiated privately, held for years, and not easily sold. But some fund structures allowed investors to redeem more frequently, which works well in stable environments but becomes harder to manage when sentiment shifts. What we’re seeing now is the first time that mismatch is being tested at scale.

What’s driving this change is not just short-term sentiment, but also who the investors are. A large part of the recent growth in private credit has been fueled by wealthy individuals, often accessing the asset class through semi-liquid structures that promised regular income with some flexibility. Now, those same investors are pulling back, with billions in redemption requests hitting funds in just the first quarter alone.

This changes the dynamic. Unlike traditional institutional capital, which is typically locked in for years, this pool of capital is more sensitive to market conditions and more likely to move when returns soften or uncertainty increases.

At its core, private credit is closely tied to how private equity deals are financed. In a typical leveraged buyout, part of the acquisition is funded with equity, and the rest is financed through debt — increasingly provided by private credit funds rather than banks or public markets.

From “No Losses” to Normal Credit Behavior

For a long time, private credit benefited from a perception that it delivered high returns with very limited losses.

That perception is now being challenged. Default rates, which have been unusually low for years, are expected to move higher, potentially reaching levels closer to 8%, compared to the 2–2.5% range that had become the norm.

Instead of pushing companies into default, lenders are often restructuring loans behind the scenes, extending maturities, relaxing covenants, or allowing borrowers to pay interest in kind rather than in cash.

These tools help avoid sudden failures, but they also mean that problems take longer to surface and capital can remain tied up in weaker assets for extended periods. So rather than a sharp spike in defaults, the adjustment is likely to be slower and more gradual.

This is one reason why parts of the market can appear stable on the surface, even as underlying risks build, because losses are often delayed rather than immediately recognized.

Even some of the most senior voices in the market are now warning that the adjustment may be more pronounced than many expect. JPMorgan CEO Jamie Dimon just pointed out that when a full credit cycle does arrive, losses across leveraged lending, including private credit, are likely to be higher than investors have been pricing in, in part because lending standards have gradually weakened over time.

And it’s not just bank executives raising these concerns. A growing number of high-profile investors are questioning the sustainability of the current private credit environment. Market veterans like Michael Burry and Jeffrey Gundlach have recently warned that the sector may be approaching a turning point, with some even drawing comparisons to the period just before the 2008 credit downturn.

Where the Pressure Is Showing Up First

The stress in private credit is not evenly spread across the market. It is concentrated in certain types of borrowers and sectors.

Highly leveraged companies, especially those that were financed in a low-rate environment, are now facing higher borrowing costs and tighter financial conditions. At the same time, sectors like software, which make up a meaningful share of many private credit portfolios, are under additional pressure due to concerns about AI-driven disruption.

This combination is important. It’s not just about higher rates or just about sector risk; it’s the interaction between the two that is creating pressure. In some cases, even large and well-known private credit funds have started to mark down the value of certain loans or report weaker performance, which would have been unusual just a year or two ago.

The Bigger Question: Who Ultimately Holds the Risk?

One of the more important developments in recent years is how closely private credit has become linked to the insurance industry.

Life insurers, especially in the U.S., have been increasing their exposure to private credit in search of higher yields, often through partnerships with large asset managers or by allocating directly to private lending strategies.

This has created a new dynamic. Risk is no longer just sitting within private funds; it is increasingly embedded in the balance sheets of insurers, which play a key role in the broader financial system.

That is one of the reasons regulators are paying closer attention. The U.S. Treasury has already begun coordinating discussions with domestic and international insurance regulators to better understand how risks are building and how they might spread.

So far, most market participants are not describing this as a systemic event. There are still important differences compared to past crises, particularly lower leverage within funds and less direct exposure from banks.

At the same time, it would be too simple to dismiss what’s happening as noise. Some investors see this as a healthy adjustment after years of strong growth and favorable conditions. Others believe it may be the early stage of a longer credit cycle turning.

Both interpretations can exist at the same time. Because what we are seeing is not a sudden shock, but a gradual repricing of risk across the asset class. Part of the challenge is that the market has not gone through a real credit downturn in quite some time, which has led some participants to assume that the current environment, low losses, and stable performance is the norm rather than a phase of the cycle.

For years, private credit was often described as stable, predictable, and insulated from market volatility. Now, it is becoming clear that it is still, at its core, a form of credit. And like any credit market, it goes through cycles — even if those cycles play out more slowly and less visibly than in public markets.

What’s unfolding is not just a test of individual funds, but of the model itself, how private credit behaves when liquidity tightens, defaults rise, and the investors who fueled its growth begin to step back.

The Other Side of the Debate: Structure Still Matters

Not everyone sees the current developments as a sign that something is fundamentally broken.

From the perspective of large private credit managers, what’s happening today looks more like a normalization after an unusually strong period, rather than the start of a systemic downturn. Defaults are rising, but they are rising from historically low levels, and some argue this is simply what a maturing asset class is supposed to look like as it moves through a cycle.

More importantly, they point to the structure of private credit itself as a key difference. These loans are typically senior in the capital structure and backed by significant equity cushions, often around 60%, which means that company valuations would need to decline materially before lenders start taking losses.

There are also important differences compared to past credit cycles. Unlike the pre-2008 banking system, private credit funds today tend to operate with lower leverage, more conservative loan-to-value ratios, and funding structures that are not reliant on short-term liquidity. That reduces the risk of forced selling and sudden market dislocation, even in periods of stress.

Even the recent wave of redemption limits is framed differently from within the industry. Rather than being a sign of fragility, these mechanisms are designed to protect investors by avoiding forced asset sales and preserving long-term value when markets become more volatile.

Let’s Continue the Conversation at 0100 Europe

At 0100 Europe, we keep the discussion going with the panel “Private Credit 2.0: From Niche to Mainstream.” The session brings together perspectives from across the ecosystem, from institutional allocators to direct lenders, to unpack how private credit is evolving beyond a financing tool into a core investment strategy.

With speakers from firms like Aegon Asset Management, Tikehau Capital, and Oaktree, the panel will offer a grounded view on where the opportunities still exist, where risks are building, and how the next phase of private credit will be defined in a more complex and selective environment.

The focus will be on what is actually driving that shift today: the rise of direct lending, the increasing use of flexible and bespoke capital solutions, and how both GPs and investors are using private credit not just to fund deals, but to actively shape outcomes and manage risk across portfolios.

Join the conversation

This week, we’re looking at a trend that could redefine how private equity creates value over the next decade.

In the past few weeks, both OpenAI and Anthropic have entered talks with major private equity firms to form joint ventures focused on enterprise AI.

On the surface, this looks like another set of strategic partnerships. But when you look closer, something more interesting emerges. Two of the most advanced AI labs in the world have independently come to the same conclusion: Building better models is not enough.

From Selling Software to Owning Implementation

The structure of these deals is relatively straightforward. OpenAI is exploring a joint venture backed by firms like TPG, Bain Capital, Advent, and Brookfield, with around $4 billion in capital and a valuation of roughly $10 billion.

Anthropic, in parallel, is discussing a separate partnership with Blackstone, Permira, and Hellman & Friedman, targeting around $1 billion to distribute its Claude AI technology across private equity-backed companies.

But the important part is not the capital.

It’s the model.

These ventures are designed to do something traditional enterprise software has always struggled with: actually getting implemented inside real businesses. Instead of selling licenses and leaving companies to figure things out, both OpenAI and Anthropic are moving toward a model built around forward-deployed teams, engineers working directly inside companies, helping integrate AI into day-to-day operations.

In other words, they are building consulting arms.

Why Private Equity Is the Perfect Partner

Private equity firms sit in a unique position in this landscape. They have:

• Board-level influence

• Direct access to management teams

• A mandate to improve performance within a defined time horizon

This makes them an ideal partner for AI deployment.

One of the biggest challenges in enterprise software has always been adoption. Even when the technology is strong, implementation slows down due to internal resistance, competing priorities, and organizational complexity.

Instead of trying to sell into a single enterprise and navigate internal resistance, AI companies can work through private equity firms to roll out solutions across entire portfolios. In theory, this removes one of the biggest bottlenecks in enterprise software: slow, fragmented adoption.

It also changes the nature of the relationship. Private equity is no longer just a customer. It becomes a distribution channel, and, increasingly, an implementation partner.

A New Layer of Value Creation

For private equity, this opens up a new dimension of value creation. Traditionally, firms have relied on a familiar set of levers: cost optimization, revenue growth, and strategic repositioning. Over time, these have become well understood and, in many cases, highly competitive.

AI introduces something different. It offers the ability to reshape how work gets done inside a company. Changing the underlying processes that produce those outcomes.

If deployed effectively, this can lead to:

• Faster decision-making

• More efficient operations

• Better use of data across the organization

What makes this especially powerful is that these improvements can be applied across multiple portfolio companies. That creates the potential for scale. Instead of building value one company at a time, private equity firms can begin to apply repeatable transformation models across their portfolios, compounding impact over time.

The Domain Expertise Gap

At the same time, the model is far more complex in practice than it appears in theory. Private equity portfolios are not uniform. They span industries, operating models, and levels of digital maturity. AI implementation, however, is not plug-and-play. It depends heavily on the specifics of how each business operates.

This creates tension. The joint ventures are designed to scale across portfolios, but the problems they are solving are highly specific. What works in a large, well-structured enterprise may not translate to a mid-market company with fragmented systems and less operational discipline. As a result, deployment is unlikely to be uniform. It will succeed faster in some parts of the portfolio and be slower in others.

There is also a deeper issue that is only starting to surface. These joint ventures are, by design, generalist. They need to be.

Private equity portfolios span multiple industries and functions, so any centralized effort has to operate across a wide range of use cases. But AI implementation is not a generalist problem. It is highly specific.

Making AI work in finance is different from making it work in the supply chain. A healthcare workflow has very little in common with a manufacturing one. Even within the same function, the details matter: how systems are configured, how data flows, where edge cases appear.

What This Means Going Forward

Zooming out, this trend points to more than a set of partnerships. It shows us a transition in how technology creates value inside companies. AI is moving from a tool that companies experiment with to a system that shapes how they operate. Private equity, in turn, is becoming one of the main channels through which that system is deployed at scale.

But the outcome is not yet decided. These joint ventures may accelerate adoption and unlock real value across portfolios. At the same time, they expose the limits of a generalist approach and highlight the importance of domain expertise.

Let’s continue the conversation at 0100 Europe in Amsterdam!

How are leading investors actually deploying AI inside their funds and portfolios? At 0100 Europe in Amsterdam, this is exactly what we’ll explore in our roundtable discussion “Smarter, Faster, Sharper — How AI and Tech Are Transforming Fund Management.”

Bringing together leading voices from firms such as Dawn Capital, BGV, Andreessen Horowitz, and 500 Global, the session will focus on how AI is being applied across the investment lifecycle, from sourcing and due diligence to portfolio management and value creation.

Join us from April 21st to 23rd, in Amsterdam.

Book your tickets here

From AI Capability to Investment Edge: How EQT Is Embedding AI into Value Creation

As AI becomes embedded in how investments are sourced, evaluated, and scaled, the question is no longer whether firms should adopt it, but how deeply it shapes their investment strategy.

In our latest 0100 Europe speaker interview, Geraldine O’Keeffe, Partner at EQT Healthcare Growth, offers a clear view into how one of Europe’s most established platforms is adapting to this new reality. In a market defined by higher capital costs and longer exit timelines, EQT is becoming more selective, focusing on businesses that don’t just withstand pressure but actively drive efficiency.

Read the interview

As private equity adapts to a prolonged high-cost environment, investors are being forced to rethink how they source deals, create value, and deploy capital. Ahead of her appearance at 0100 Europe (April 21–23), we spoke with Geraldine O’Keeffe, Partner at EQT Healthcare Growth, about how one of Europe’s leading investment platforms is transiting today’s market dynamics—across healthcare, technology, and beyond.

How is dealmaking in 2026 shaping up compared to last year?

From EQT’s perspective, the fundamentals remain consistent, but the level of selectivity has increased. The firm continues to focus on its core pillars—technology and healthcare—but within those sectors, there is much greater nuance.

“In a high-cost environment, we’re spending more time understanding where macro pressures—such as budget constraints or reduced consumer spending—are likely to have an impact,” Geraldine explains. “That naturally shifts attention toward subsectors that can improve efficiency or reduce costs.”

In other words, resilience is no longer enough—companies must actively contribute to cost optimization.

Where is EQT finding the most attractive opportunities in healthcare?

EQT takes a broad view of healthcare, investing across life sciences tools, diagnostics, medtech, healthcare IT, pharma services, and therapeutics.

This breadth is intentional.

“By casting the net wide, we gain a more holistic view of the healthcare ecosystem,” says.

A key differentiator is EQT’s integrated platform. With a strong venture arm alongside mid-market and large-cap strategies, the firm benefits from continuous insight flow across the lifecycle of innovation.

“Our venture strategy gives us early visibility into emerging technologies, therapeutic trends, and pharma priorities. That perspective feeds directly into how we evaluate opportunities in the mid-market.”

While these strategies operate independently, the cross-fertilization of expertise is a critical advantage.

How are firms adapting deal structures in a slower exit environment?

With exits taking longer and valuation gaps persisting, the industry is evolving structurally.

“We’re definitely seeing increased use of continuation vehicles and structured solutions,” Geraldine notes. “These allow firms to hold onto high-performing assets longer while still delivering liquidity where needed.”

At EQT, however, one principle remains largely unchanged: control.

“As active owners, we strongly believe in majority positions. That level of control is key to executing our value creation strategy effectively.”

What drives value creation at EQT?

EQT’s approach is built on a combination of sector specialization, institutional knowledge, and operational depth.

“A big part of our ‘secret sauce’ is simply experience,” O’Keeffe says. “We’ve been investing in healthcare for decades, and that long-term perspective allows us to continuously refine our playbooks—not just at the sector level, but at the subsector level.”

Another critical component is the firm’s network of industrial advisors.

“We bring in deep domain expertise both during diligence and throughout ownership. That combination—internal knowledge plus external expertise—is what really drives value creation.”

How is AI changing dealmaking and portfolio strategy?

AI is now fully embedded in EQT’s investment process—not just as a thematic opportunity, but as a core diligence lens.

“Every investment today requires us to ask: how will AI impact this business? Could it be disrupted? Or can it benefit from AI adoption?” explains.

EQT has invested heavily in internal capabilities, from proprietary data platforms to dedicated tech teams, ensuring that AI is integrated across sourcing, diligence, and portfolio management.

But the challenge remains significant.

“Nobody has all the answers yet. The key is staying connected—to experts, to networks, and to the companies themselves—and being ready to support businesses as the landscape evolves.”

Is AI a decisive factor for LPs when evaluating funds?

Interestingly, while AI is top-of-mind operationally, it is not yet a dominant discussion point with limited partners.

“LPs are aware that EQT is a tech-forward firm, and they take comfort in that,” O’Keeffe says. “But AI itself hasn’t become a central topic in fundraising conversations—at least not yet.”

Where does AI have the greatest potential in healthcare?

For O’Keeffe, the opportunity is clear—and transformative.

“Healthcare generates enormous amounts of data, from drug discovery to patient care,” she says. “AI has the potential to improve efficiency across the entire value chain.”

From accelerating R&D to optimizing hospital operations, the implications are vast—but must be balanced with strict requirements around data privacy and confidentiality.

Looking ahead, what will define winning healthcare investors?

Success in 2026 and beyond will not hinge on a single capability, but on the ability to integrate multiple dimensions: scientific understanding, operational execution, and technological fluency.

“It’s about combining deep sector expertise with the ability to adapt quickly—especially as technologies like AI continue to evolve,” concludes.

Geraldine O’Keeffe will be speaking at 0100 Europe, taking place April 21–23.

For years, private equity relied heavily on software investments. These companies offered recurring revenue, high margins, and steady growth. Many firms increased their exposure to enterprise software over the past decade, often using leverage to enhance returns.

In 2026, things are different. New AI tools are raising questions about the long-term durability of certain software business models. Some tasks handled by enterprise software may now be automated or replicated more efficiently using AI systems. This has led investors to reassess growth assumptions, margins, and valuation levels across the sector.

Public software multiples have declined, and private-market buyers are requesting broader discounts on tech-heavy portfolios. Lenders are also becoming more selective, particularly in transactions tied to software assets. As a result, exit timelines are extending, and return expectations are being adjusted.

At the same time, private equity firms are exploring how AI can improve internal processes. AI is being used to accelerate due diligence, analyze data more efficiently, and support portfolio company operations. The long-term impact remains uncertain, but AI is now influencing both risk assessment and value creation strategies across private equity.

A Correction in Motion

Shares of big private-equity and private-credit firms have dropped sharply, and it’s not only because of worries that artificial intelligence could hurt software companies. Firms such as Apollo Global Management, Blackstone, Ares Management, KKR, and TPG saw their shares peak in late 2024 or early 2025 after a long rally. Since then, their shares have fallen more than 30%, a steeper slide than many software stocks or private lending funds.

That suggests investors are worried about deeper issues.

Even without AI fears, private equity was likely headed for a slowdown. Higher interest rates, less borrowing, and a tougher market for selling companies have made strong returns harder to achieve. These firms still collect steady management fees, but their long-term growth depends on successful investments and bringing in new money.

For years, cheap debt and rising markets helped fuel gains. Now, with financing more expensive and exits harder to pull off, investors don’t expect a quick return to past highs.

This pressure ties directly to private equity’s heavy bet on software.

Software has been one of the largest and most profitable areas for private equity over the past decade, making up a significant share of many firms’ portfolios.

Firms spent years snapping up software companies because they seemed dependable and predictable. Groups like Thoma Bravo and Vista Equity Partners borrowed heavily to buy niche software providers serving call centers, hospitals, and other industries.

At the same time, rapid advances by AI developers like Anthropic have raised fears that many specialized software tools could be recreated more quickly and more cheaply using AI.

The anxiety has spread across Wall Street.

AI Risk Moves Into Private Markets

Investors are questioning how much of firms like Blackstone and Apollo have tied up in software deals struck when rates were low and valuations were high. Now borrowing costs are up, growth is slower, and AI adds another layer of uncertainty, especially for software built around routine tasks that can be automated.

While some executives argue that strong companies will adapt and use AI to improve their products, selling these businesses at premium prices may be difficult for some time.

Fears that artificial intelligence could hurt major software companies are now spilling over into private markets. Investors who once eagerly bought stakes in private equity portfolios filled with tech companies are becoming more cautious.

According to Bloomberg, buyers are now asking for discounts of up to 20% to purchase pieces of these portfolios—far steeper than the roughly 5% discounts seen just weeks earlier. The shift shows that concerns about AI disrupting business models are no longer limited to public stocks; they are affecting private deals as well.

This matters because private equity firms have poured huge amounts of money into technology and software over the past decade. If buyers demand bigger discounts to take those assets off their hands, it becomes harder for firms to sell investments and return cash to their investors.

That could slow dealmaking, reduce reported valuations, and add pressure to an industry already dealing with higher interest rates and tougher exit markets. In short, AI worries are beginning to reshape one of the hottest trades in private markets.

AI: Threat, Tool, or Both?

The Economist also argues that private-equity firms face a serious challenge as artificial intelligence threatens the very software companies that fueled their rise. Over the past decade, buyout funds poured massive sums into enterprise software businesses built on steady subscription revenue, seeing them as reliable, high-margin investments.

But now AI tools could recreate or replace many of these applications faster and more cheaply, putting pressure on growth and valuations. Because many of these deals were financed with heavy borrowing, any slowdown in performance could quickly create financial strain.

Not everyone sees AI purely as a threat.

McKinsey says generative AI could transform private markets, but only if investors use it carefully. Many firms are excited about using large language models to accelerate research and analyze deals more quickly, and most believe the technology will have a major impact within five years.

But McKinsey warns that AI tools can produce overly optimistic “happy talk,” contain factual errors, or omit critical details, especially when they rely solely on public data. In tests comparing AI-generated reports with expert interviews, important insights were often missing or contradicted. McKinsey argues that the best approach is to combine AI’s speed with proprietary research and strong internal processes. In other words, AI can help investment teams move faster, but it shouldn’t replace careful judgment and deep industry expertise.

Spotlight: EU Consultation on Private Equity Exits

The European Commission has launched a public consultation on private equity exits in the EU, highlighting growing concern about liquidity constraints in European capital markets.

Policymakers are seeking feedback on barriers to exiting private investments, including IPO delays, valuation gaps, and limited secondary market activity. The consultation also explores the potential creation of a secondary trading platform for private company shares to improve liquidity and support capital formation.

Learn more

🌍 Across the Ecosystem | AI and the Repricing of Private Equity

Institutional investors, pension funds, insurers, family offices, and private equity sponsors are increasingly focused on how artificial intelligence is reshaping risk and return assumptions in private markets.

In a market where leverage is more expensive and exits are harder to execute, AI is no longer a side conversation. It is becoming central to how investors assess the durability of earnings, the sustainability of margins, and long-term growth. Below is a snapshot of how the discussion around AI-driven risk and opportunity is evolving across the private equity ecosystem, along with recent headlines shaping this debate.

📄 Article | Does Private Credit Really Have an AI Problem?

A Barron’s commentary argues that fears that artificial intelligence could trigger a crisis in private credit may be overstated. Recent reports suggested that as much as 35% of private credit portfolios face elevated AI disruption risk because many loans are tied to software companies.

That narrative contributed to sharp declines in stock prices for firms such as Blackstone and KKR and raised concerns about broader stress in the asset class. However, the author contends that markets are conflating equity risk with credit risk. Private credit lenders are not betting that software companies will thrive forever—only that they will generate enough cash flow to repay loans before maturity, which typically averages around five years.

Read the article

📄 Article | Why AI Worries About Software Are Hitting Private Credit

A Morningstar article explains that concerns about artificial intelligence disrupting software companies are now affecting private credit markets. Over the past five years, private lenders increasingly favored loans to enterprise software firms because of their high margins, recurring subscription revenue, and stable customer bases.

However, as AI tools lower barriers to entry and allow customers to build their own solutions, investors are questioning whether those advantages will hold. The worry is that margin compression and competitive pressure could weaken the very business models that supported the rapid growth of private credit lending to software.

Read the article

Join the Debate at 0100 Europe — Amsterdam

Roundtable Discussion: The Next Generation of Value Creation in Private Equity

As the private equity landscape evolves, value creation is becoming more multidimensional—driven by operational excellence, technology adoption, innovative deal structuring, and new approaches to capital formation.

At 0100 Europe, this discussion moves from theory to practice.

Our private, pre-registration–only roundtables convene up to 30 carefully selected participants—Private Equity GPs, LPs, and senior industry experts focused on the future of value creation.

The session opens with a 15-minute panel featuring Thought Leaders who will outline the structural challenges and emerging opportunities shaping the next generation of value creation strategies. Confirmed speakers include:

• François Candelon, Partner Value Creation at Seven2

• David Jones, Operating Partner at Pollen Street Capital

From April 21st to 23rd, in Amsterdam.

Book your tickets here

For years, private equity and private credit moved in parallel.

PE focused on ownership and upside. Credit focused on downside protection and yield. Different return profiles. Different teams. Different conversations with LPs.

In 2026, that separation is slowly fading.

Private credit is no longer just a capital solution sitting alongside buyouts. It’s impacting how deals get done, how portfolios are managed, and how exits are engineered. And if you’re in private equity, the change matters more than ever.

Why Private Credit Is Attractive for European Investors in 2026

Europe’s syndicated loan and high-yield bond markets remain smaller and less accessible than in the U.S., leaving a persistent funding gap for mid-market companies. Private credit funds have stepped into that gap with tailored, bespoke solutions and stronger lender protections, features that many allocators now see as a competitive advantage.

Check out our interview with Stefano

Mark Jochims, head of European Private Credit and a member of Morgan Stanley's Private Credit & Equity executive committee, also noted in a recent article the relative resilience of European private credit across economic cycles and its attractive risk-adjusted return profile. Floating-rate structures offer a natural hedge in a higher-for-longer interest-rate environment and conservative deal terms.

On the demand side, allocators themselves are vocal about the appeal. A recent panel of senior private capital professionals highlighted Europe’s less-crowded funding landscape and growing opportunity set as key reasons to increase allocations to Europe.

In practitioner circles, many echo this sentiment: market participants describe Europe as offering a “lender’s market” in certain mid-market segments, where disciplined underwriting can capture wider spreads and stronger covenants than in more mature U.S. markets.

Direct Lending in 2026: Stable Activity & Better Structuring

The latest European data (as of January 31, 2026) show the deal count holding steady year-to-date, even as overall volume is slightly behind 2025. Over the last three months, activity has tracked closely with Q4 2025 levels, signaling stability rather than slowdown. Capital is clearly available, but underwriting is tighter, and lenders are being more selective about where they deploy it.

What stands out most is that acquisition financing is firmly back at the center of issuance. In January alone, 86% of direct lending loans supported M&A activity, totaling just over €2 billion in volume. LBO activity has been trending upward since the dip in Q3 2025, and in recent months, direct lenders have funded more than five times as many buyouts as the broadly syndicated market.

At the same time, spreads continue to compress. Over the past 12 months, average direct lending spreads have tightened to around 520 bps, with median spreads near 500 bps. Nearly half of the new LBO spreads have priced below 500 bps. Meanwhile, the leverage gap between BSL and direct lending markets has narrowed to less than one turn (0.7x), down from 1.31x in 2024. This reflects a mix of improving conditions in syndicated markets and a more measured approach from private credit funds as risk appetite moderates.

The Asset Class is Adapting To Slower Exist Dynamics

In 2025, firms completed a record $15 billion in continuation deals, up from about $4 billion the previous year. In these transactions, managers establish new funds to purchase loans from their older funds. This allows them to return some cash to investors while retaining assets that have not yet been repaid. Many of these loans were originally used to finance leveraged buyouts, but exits and refinancings have been delayed due to higher interest rates and weaker deal activity.

The increase in continuation vehicles reflects two clear trends: substantial capital raised in recent years and growing LP demand for distributions. While these structures can provide liquidity, they also extend the holding period of certain loans.

At the same time, investors are paying closer attention to credit quality, especially after several high-profile bankruptcies and concerns about how some funds may perform if higher rates continue.

What Is Investor Sentiment Saying About Private Credit?

Concerns around private credit have grown louder in recent weeks, particularly around AI disruption and credit quality.

Ares CEO Michael Arougheti described these fears as “odd” and “frustrating,” noting that 97% of the firm’s wealth clients have not requested redemptions and that institutional investors are not showing signs of panic. From his perspective, market volatility reflects sentiment rather than widespread distress, and underlying fundamentals in private credit remain stable.

Hamilton Lane’s co-CEO Erik Hirsch echoed that view, pushing back against claims of rising defaults and excessive leverage. Drawing on data spanning more than 68,000 private market funds and over 178,000 portfolio companies, he said defaults remain low and leverage levels broadly flat. Given Hamilton Lane advises on $860 billion in assets and manages $145 billion directly, Hirsch argues the firm has a broad vantage point across buyouts and private credit, and that the data does not support a narrative of systemic stress.

Still, skepticism is building in parts of the market.

An FT Alphaville analysis highlighted the concentration of private credit exposure in software and business services, particularly within Business Development Companies (BDCs), which represent roughly $450 billion of assets. UBS estimates that 25–35% of private credit portfolios face elevated AI disruption risk, with technology-heavy segments most exposed.

The debate now centers on whether private credit markets are accurately pricing disruption risk, or simply lagging equity signals. For now, industry leaders argue fundamentals are intact. But scrutiny around underwriting discipline and sector concentration is clearly increasing.

🗓️ 0100 DACH Panel Spotlight: Where LPs See Opportunity and Risk in PE

At 0100 DACH in Vienna, one of the key conversations will be the Fireside Chat: Where LPs See Opportunity and Risk in PE. As private equity enters a more selective cycle, LPs are reassessing where they want exposure—across small-, mid-, and large-cap strategies, geographies, and structures such as secondaries and continuation vehicles.

This session will examine how institutional investors are thinking about portfolio construction today, where they see the most compelling risk-adjusted returns, and how themes such as value creation and AI are influencing allocation decisions.

Bringing together Tanja Saaty (Managing Director at Constitution Capital), Jørgen Blystad (Investment Director at Argentum), and Bernhard Baumann (Managing Director, Private Markets at IW Group), the discussion will offer direct LP perspectives from fund-of-funds, institutional capital, and family office investors.

Learn more

🌍 Across the Ecosystem | Thoughts on The Rising Interest in Private Credit

Institutional investors, insurers, pension funds, family offices, and private equity sponsors are increasingly aligned on the role private credit can play in portfolios: delivering stable income, structural downside protection, and greater control in volatile markets.

In a world where public fixed income has struggled to provide both yield and predictability, private credit is viewed not just as a complement to buyouts but also as a strategic allocation in its own right. Below is a snapshot of how the debate around private credit as a core allocation is evolving across the European private markets ecosystem, along with recent headlines from this area.

🗞️ News | Fortress’ Latest Private Debt Fund Seeks to Lure Insurance Firms

Fortress Investment Group is adjusting its latest private debt vehicle, Fortress Lending Fund V, to better attract insurance companies and European institutional investors. According to people familiar with the matter, the firm is adding an unleveraged sleeve to the fund, which will primarily focus on direct corporate loans. Previous vintages of the strategy offered only a leveraged version, so this new structure marks a shift to meet insurers’ capital and regulatory preferences.

By introducing an unleveraged option, Fortress is aligning the fund more closely with the needs of insurance balance sheets, which often favor lower-risk, capital-efficient structures. The move reflects broader demand from European insurers for private credit exposure that offers yield and downside protection without additional leverage risk, signaling how managers are tailoring products to capture growing institutional appetite in the asset class.

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📄 Article | Private credit can ride out the tech storm

In a letter responding to the FT’s Lex column on the “SaaSpocalypse,” Nick Baldwin of Lincoln International argues that concerns about AI-driven disruption in software-heavy private equity portfolios may not translate into systemic risk for private credit.

He notes that for European private lenders, AI-related disruption has been a core underwriting consideration since late 2022. Rather than treating “software” as a single category, lenders distinguish between narrow tech solutions that face displacement risk and broader, AI-integrated platforms that may actually benefit from the change.

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🗞️ News | CAPZA Raises Nearly 1.4 Billion Euros For Private Debt 7 Fund

CAPZA, the private debt arm of BNP Paribas Asset Management Alternatives, has completed the first closing of its CAPZA Private Debt 7 fund, raising nearly €1.4 billion. The amount already exceeds half of what was raised for its previous vehicle, CAPZA Private Debt 6, marking a significant milestone for the firm’s private debt platform. The strong early close reflects continued investor appetite for CAPZA’s strategy, which is backed by a 20-year track record in the asset class.

The fundraising drew support from both returning investors and new LPs, with more than 30% of commitments coming from international markets, including Germany, Belgium, Italy, Japan, and the Middle East. The broad geographic participation underscores CAPZA’s expanding global footprint and highlights sustained demand for European private credit strategies among institutional investors seeking stable income and diversification.

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This week, we’re turning the spotlight on one of the most ambitious and increasingly consequential developments in European private markets: The European Long-Term Investment Fund - ELTIFs.

Long positioned as a policy tool rather than a portfolio allocation, ELTIFs are now moving into a very different phase. What was once a niche regulatory framework is starting to appear in real investor portfolios across private wealth, insurance, and institutional channels.

For years, access to private markets in Europe followed a familiar pattern. Long-term assets, private equity, infrastructure, private credit, and real assets were largely reserved for institutions and a small segment of ultra-high-net-worth investors.

The European Long-Term Investment Fund regime aims to change that and stands out as one of the most significant advances in European investment policy over the past decade. Originally created to channel capital into long-term productive assets, the latest ELTIF reforms are now putting retail investors on a more equal footing with institutions.

ELTIF 1.0 was designed to change that, offering a pan-European structure that could open these markets to a broader investor base. In practice, however, the first iteration struggled to gain traction, constrained by rigid rules, limited flexibility, and operational complexity. That experience set the stage for ELTIF 2.0, the updated framework, and what it means for investors navigating an environment defined by lower liquidity, longer holding periods, and a growing need for diversification beyond public markets.

Now, let’s dive deeper into the topic below.

ELTIF 1.0 — The Big Picture

Introduced in 2015, it was the European Union’s first attempt to create a harmonised vehicle that could channel long-term capital into private and real-economy assets while remaining accessible beyond purely institutional investors.

The framework was designed to support investment in infrastructure, private equity, private debt, real estate, and SMEs, aligning capital markets with broader EU objectives such as economic growth, sustainability, and long-term competitiveness. In theory, ELTIFs were positioned as a bridge between institutional private markets and the emerging private wealth segment.

In practice, however, ELTIF 1.0 remained largely institutional in nature.

Strict constraints, including a €10,000 minimum investment for retail investors, portfolio concentration limits, rigid liquidity rules, and a narrow definition of eligible assets, significantly limited distribution and product innovation. As a result, most ELTIFs were either marketed exclusively to professional investors or embedded within insurance wrappers, particularly in France.

By 2021, despite strong policy backing, the total number of ELTIFs remained limited, and assets under management were modest relative to the broader European private markets universe.

Nevertheless, ELTIF 1.0 played an important foundational role.

It established regulatory legitimacy for retail access to long-term, illiquid assets, created a pan-European passport for private-market products, and laid the groundwork for operational standards on governance, investor protection, and transparency. While adoption fell short of expectations, the experience of ELTIF 1.0 directly informed the design of ELTIF 2.0 — shifting the framework from a policy concept to a commercially viable structure capable of scaling across private wealth channels.

ELTIF 2.0 — What Changed for Investors?

ELTIF 2.0 is where the concept finally started to work.

After years of limited adoption, the revised framework signals a change of focus from regulatory ambition to market relevance. By the time the new rules took effect in January 2024, it was widely acknowledged that ELTIF 1.0 had failed to attract meaningful scale. ELTIF 2.0 is the EU’s response: a deliberate attempt to turn ELTIFs into products investors can actually use, distribute, and allocate to.

ELTIF 2.0 relaxes the rigid constraints that made the original regime impractical, enabling semi-liquid structures, fund-of-funds strategies, and more flexible portfolio construction. Minimum investment thresholds and retail allocation caps were removed, leverage limits were raised for professional-only products, and the investment universe was broadened well beyond its original scope.

For investors, this translates into tangible access to private debt, infrastructure, and real assets through vehicles that are no longer structurally disadvantaged relative to traditional alternatives.

The framework had also brought to the surface different operational concerns from the investment community. Managers broadly agree that while regulatory flexibility has improved, frictions remain, particularly around portfolio eligibility and liquidity mechanics.

Why are we looking at ELTIFs from an investor’s POV?

ELTIFs should not be viewed as a replacement for traditional portfolios, but as a complementary allocation for investors with long-term horizons. The value of ELTIFs lies less in their current size and more in what they signal:

• Private market exposure is moving downstream

• Regulatory frameworks are catching up with investor demand

• Access to long-term assets is no longer institution-only

🗓️ 0100 DACH Panel Spotlight: Private Wealth in a Fragmented Market

As structures like ELTIFs continue to open private equity to a wider group of investors, private banks and family offices are rethinking how they design products, manage risk, and educate clients. So, this panel is one of our key conversations at 0100 DACH 2026, addressing how family offices and private banks are taking on a more active role in private equity.

Bringing together Stefan Kirsch (Bergos Privatbank), Christian D’Amico (Pantheon), Lorenz Brunner (UBS Unified Global Alternatives), and Oliver Oswald (AltamarCAM Partners), the panel will explore how private wealth is moving from passive allocation to a more sophisticated, hands-on approach in private markets.

Learn more

🌍 Across the Ecosystem | Thoughts on The Rise of ELTIFs

Since ELTIF 2.0 came into force, the conversation across Europe’s investment ecosystem has changed. Asset managers, distributors, regulators, and investors are broadly aligned on the opportunity ELTIFs represent: expanding access to private markets and mobilising long-term capital into the real economy.

Market participants point to eligibility constraints, portfolio flexibility, liquidity mechanics, and global diversification limits as the next limitations to address. Below is a snapshot of how the ELTIF 2.0 debate is unfolding.

📄 Article | The future of asset management

The future of asset management is being shaped by a mix of trust, technology, and changing client expectations. Despite rapid innovation, industry leaders agree that long-term trust and a strong client focus remain the foundation of the business. Technology, from AI and data to digital platforms, is transforming how firms operate and engage with investors, making portfolios more personalized and improving access to information.

At the same time, investors across institutional, wealth, and retail channels are increasing allocations to ETFs and private markets, pushing managers to offer more transparent, scalable, and digitally enabled solutions.

Read the article

🗞️ News | Morgan Stanley eyes UK LTAF after ELTIF launch

Morgan Stanley Investment Management is evaluating a UK Long-Term Asset Fund (LTAF) following the launch of its first ELTIF under the revised ELTIF 2.0 framework, signaling growing confidence in long-term, semi-liquid structures for private wealth.

The move reflects rising demand in Europe for multi-asset private market strategies, particularly among mass-affluent and retail investors seeking risk-managed access to alternatives through familiar distribution channels.

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🗞️ News | RGreen targets retail investors with transition ELTIF

RGreen Invest has launched its first ELTIF aimed at retail investors, marking a strategic expansion beyond its traditional institutional base. The fund, RGreen Energy Transition, is structured as an SFDR Article 9 vehicle and targets investments aligned with the energy transition, including low-carbon infrastructure, electrification, and energy efficiency.

The ELTIF will invest both directly and through RGreen’s existing funds, Infragreen and Infrabridge, allowing the manager to leverage established strategies while broadening access to unlisted assets for individual investors.

Read the article

With 2025 complete and new investment cycles underway, this is a good time to review how private equity performed over the past year. Looking at full-year data provides a clearer view of capital flows, deal activity, and investor behavior beyond individual transactions.

In Europe, private equity recorded its strongest year on record, with higher deal values, more transactions, and an increase in large buyouts supported by lower borrowing costs. At the same time, fundraising became more concentrated, mirroring trends seen in venture capital. A smaller group of large, established private equity firms captured their biggest share of capital in more than a decade, as investors prioritized scale and proven track records.

European Private Equity Has a Record Year

European private equity had a strong year in 2025, with deal activity reaching record levels. Both the total deal value and the number of deals rose sharply from the year before. Lower interest rates across Europe made borrowing cheaper, which helped support larger transactions. While trade tensions caused some early hesitation, confidence improved as the year went on.

Deals also became larger, showing that investors were more willing to take risk. Very large deals worth more than €1 billion made up a much bigger share of total activity. Both average and typical deal sizes increased, reflecting better financing conditions and stronger support from lenders and sponsors.

US investors played an important role in Europe’s recovery. A growing share of European deals involved US firms, especially the biggest transactions. US investors brought deep pools of capital and focused on Europe for diversification and better value compared with their home market.

Big Funds Win as They Capture Record Share of Capital

Additionally, fundraising became more concentrated in 2025, as investors allocated more of their money to the largest and most established firms. The top 10 private equity funds raised nearly half of all US capital, the biggest share in more than ten years. While these large firms continued to grow, smaller managers struggled to raise money. Investors, especially pension funds, are becoming more cautious as private equity has slowed and cash returns have become harder to find.

This shift shows how investor priorities have changed. With deals and exits taking longer, many investors are cutting back on smaller or weaker managers and sticking with firms they trust to handle big investments.

Our IPO Exit Model Is Losing Its Shine

European private equity is quietly moving on from IPOs as the default exit, and the numbers make it hard to argue otherwise. Even after hopes of a rebound, PE-backed IPO exit value in Europe fell sharply in 2025, with fewer deals and smaller outcomes underscoring how fragile public markets remain. While a handful of large listings late in the year offered some optimism, they weren’t enough to change the bigger picture: IPO activity now looks structurally weaker than in past cycles, not just temporarily slow.

Faced with volatile markets, valuation gaps, and long execution timelines, sponsors are increasingly choosing sponsor-to-sponsor deals and secondary exits that offer speed, certainty, and control. For European PE managers under pressure to return capital, the public markets are no longer the obvious finish line; they’re just one option among many, and often not the most attractive one.

A Comeback Year for Hedge Funds

As investors became more selective, the shift went beyond which private equity firms they supported. It also changed where money flowed across markets. Liquidity and flexibility became more important, especially as public markets looked expensive and private equity returns slowed.

That opened the door for hedge funds. With the ability to move faster and manage risk more actively, hedge funds took a leadership role in 2025 and took on a larger role in investor portfolios. The industry had its strongest year ever, adding about $628 billion in assets and growing past $5 trillion in total. Solid returns, close to 13 percent on average, helped rebuild confidence. As worries about an overheated stock market grew, investors turned to hedge funds for better risk control and greater flexibility.

Private equity struggled as deals slowed and cash returns became harder to deliver. Hedge funds filled that gap by offering liquidity, faster decision-making, and more reliable performance. Large multi-strategy firms led the way, showing they could handle changing markets with discipline. After a tough period in 2022, hedge funds proved their value again and emerged as a trusted, steady choice for investors focused on stability and long-term results.

Private Equity Has Momentum on Both Sides of the Atlantic

Europe wasn’t the only market with strong activity in private equity; the US is following closely, even if the recovery looked different on each side of the Atlantic.

In Europe, deal activity reached record levels as lower interest rates made financing easier and brought confidence back. In the US, dealmaking also improved, but it was concentrated in specific sectors rather than spread evenly across the economy. Construction stood out as the biggest winner, with deal value rising to about $31 billion, well above recent averages. Engineering and healthcare IT also gained momentum, showing where investors were most confident in deploying capital.

That selectivity showed up clearly in exits and fundraising. In the US, exits remained slow overall, with only a handful of sectors delivering strong results. This made investors more cautious and pushed them toward larger, more established firms that could manage longer holding periods and tougher exit conditions.

Europe, by contrast, benefited from improving conditions and growing interest from US investors, especially in larger deals where scale and certainty mattered most.

🗓️ 0100 DACH Panel Spotlight: Middle Market Private Equity Buyout Trends

0100 DACH 2026 opens the year with a confident, clear-eyed conversation about the state of middle-market private equity in the region.

Bringing together Andreas Klab (Rivean Capital), François Candelon (Seven2), Jasprit Chana (Long Arc Capital), Christoph Rinnert (Tikehau Capital), and Philipp Berghofer (Mutares), the panel cut through the noise around macro uncertainty to focus on what really matters: fundamentals, execution, and patience. With ample dry powder still on the sidelines, investors agreed that selectivity, not speed, is shaping today’s deal activity.

Learn more

🌍 Across the Ecosystem | News & Useful Resources for You

Everyone in private equity is talking about liquidity and exits right now — and for good reason. After years of heavy dealmaking and higher valuations, firms are now working through a large backlog of assets bought during the boom. While deal activity improved in 2025, exits have not kept pace, leaving investors more focused on how and when capital can be returned rather than on new growth alone.

That pressure is showing up across the industry. Here’s a look at what’s happening across the industry:

🗞️ News | Private Equity Has More Housecleaning to Do in 2026

Private equity firms made some progress in 2025 selling older portfolio companies, but the industry is still carrying a large backlog into 2026. Despite an improvement in overall deal activity, the number of U.S. companies held by private equity continued to rise, reaching about 12,900 by the end of September, according to PitchBook.

Average holding periods have come down from their 2023 peak but remain high at nearly seven years, well above pre-pandemic levels. The slow pace of exits has frustrated investors and made fundraising more difficult.

The buildup traces back to the buying boom before 2022, when firms paid high prices using cheap debt. Rising interest rates then pushed up financing costs and sharply reduced dealmaking, leaving firms holding assets bought at peak valuations. Many managers are now reluctant to sell at lower returns, since doing so would hurt performance metrics and compensation.

Read the article

🗞️ News | Private equity backers offload record amount of old fund stakes

The rush into private equity secondaries turned into one of the clearest signals of stress in the buyout market in 2025. With exits hard to come by, investors sold a record amount of stakes in older funds, pushing global secondary transactions past $110 billion for the year, according to Financial Times.

What was once a niche corner of private markets has become a main release valve, allowing investors to raise cash without waiting for fund managers to sell underlying companies.

Read the article

Created over 20 years ago, Andera Partners is a major player in private company investments in France and internationally, managing €4.8 billion across a diversified platform.

Drawing on Andera’s experience across venture, growth, and buyout investments, the conversation explores how LP expectations are evolving, why Article 8 has become the new baseline, and why truly credible Article 9 strategies remain rare. De Birmingham makes a clear case for moving beyond compliance and reporting toward operational transformation—using sustainability data as a strategic asset rather than a box-ticking exercise.

The discussion also addresses physical climate risks, supply chain disruption, and resource constraints as immediate financial issues, not abstract long-term concerns. Ultimately, the interview reframes sustainability not as a moral stance or marketing tool, but as smart, disciplined investing in an increasingly constrained world.

We know many of you are already in holiday mode and may finally have some time to engage with thoughtful, long-form content. With that in mind, we have prepared a private equity “Experts’ Thoughts” recap that reflects on a year that has been anything but ordinary.

2025 has been a year marked by the rise of evergreen funds, growing secondaries activity, deeper AI adoption within private equity teams, and an apparent reshaping of what sustainability truly means in private markets, with fewer buzzwords and more measurable results.

Over the past year, we have spent a great deal of time listening. Through interviews and podcast conversations with private equity investors, LPs, family offices, and operators, one pattern became apparent very quickly. Despite different strategies, geographies, and market cycles, there was remarkable alignment among industry leaders in how they think about value creation, risk, liquidity, and execution.

Across the board, the conversation changed. Founders, GPs, LPs, and family offices spoke less about ambition and more about execution and more about resilience.

Rather than asking how investors theoretically plan to adapt, we focused on what they are doing in practice. The answers were strikingly consistent. So instead of recapping individual episodes, this edition distills the themes that surfaced repeatedly, regardless of fund size, strategy, or geography.

Below are the key learnings that defined private equity in 2025.

Value Creation Starts With a Clear Exit Plan

Across discussions with François Candelon at Seven2 and Maximilian Buttinger at Warburg Pincus, value creation comes through as less about applying a standard playbook and more about practicing real discipline.

Instead of launching dozens of initiatives, both mentioned narrowing the focus early to just a few priorities that truly move the needle, and sticking to them relentlessly.

François described how this starts with a clearly defined exit vision from day one. At Seven2, every portfolio company aligns around a specific “exit profile” that serves as a filter for decision-making. The goal isn’t to do more, but to do what matters most for the future buyer.

Read the interview

That clarity helps management teams avoid distractions, move faster, and allocate their time and capital to the two or three levers that will ultimately shape the equity story at exit.

Maximilian reinforced this idea from an operational angle. In today’s market, where valuation multiples are tighter and external tailwinds are weaker, execution speed and focus have become critical.

Read the interview

Operational excellence, in his view, is about delivering results faster and more efficiently than competitors, not through grand strategies, but through sharp execution. When multiple expansions can’t be assumed, disciplined execution is no longer optional; it’s the primary driver of returns.

Co-Investing Has Matured, and Relationships Matter More Than Ever

Co-investing came up often, but what stood out was how much the conversation had changed. It’s no longer talked about as a tactical add-on or a way to save on fees.

Instead, both Volker Wende of SwanCap and Jørgen Blystad of Argentum described co-investing as a mature, highly structured strategy that experienced LPs use with real intent.

Read the interview

For them, the value goes far beyond economics.

Co-investments give LPs a front-row seat to how GPs actually operate over time, how they make decisions, how they work with management teams, how they handle governance, and how they execute when things don’t go to plan. That kind of visibility is hard to get through fund commitments alone.

Read the interview

A similar perspective came through in our conversation with Vahit Alili, Senior Investment Director at Schroders Capital, who looks at co-investments through the lens of portfolio construction and access.

Vahit explained how combining fund-of-funds exposure with co-investments helps investors reach the small and mid-market segment, where returns tend to be driven by primary buyouts and specialist knowledge rather than scale.

Read the interview

Co-investments work best when they are part of a long-term LP–GP relationship, with shared underwriting and real alignment of capital at risk. In fragmented markets like DACH, this approach not only improves access to specialist managers but also leads to better decision-making and more balanced risk over time.

Flexibility - Your Competitive Advantage in Today’s Market

As higher interest rates and slower exits reset the private equity landscape, flexibility became a real competitive edge.

In discussions with Stefano Zavattaro at CAPZA and Raffaele Legnani at H.I.G. Italy, the small and mid-market consistently stood out as more resilient. These deals typically use lower leverage, which reduces pressure in a higher-rate environment.

Read the interview

They also benefit from a wider range of exit options, from secondary buyouts to strategic sales, making them less dependent on perfect market timing. Just as important, value creation in this segment is deeply operational, with hands-on work on consolidation, international expansion, and digital transformation driving returns even when exits slow.

Read the interview

The same preference for flexibility showed up on the LP side.

Luigi Croce from Schroders Capital explained how semi-liquid and evergreen fund structures are gaining momentum as investors seek smoother capital deployment and greater liquidity control.

Read the interview

In a world where traditional drawdown funds can take years to invest and return capital fully, these structures offer immediate exposure, ongoing compounding, and the ability to adjust allocations over time without abandoning long-term private market exposure.

ESG Is Being Used as a Value Creation Tool

The ESG discussions this year were focused on how sustainability is applied in practice. To find out more about this, we talked to Fredrik Franke at Norvestor, and April Tissier at Ardian described a change toward using ESG as a lever for value creation.

At Norvestor, sustainability is structured around two objectives. The first is exit readiness, ensuring portfolio companies meet buyer expectations through appropriate policies, processes, and reliable data. The second is the use of ESG themes to support commercial outcomes, such as revenue growth, cost efficiency, and stronger competitive positioning within portfolio companies.

Read the interview

At Ardian, ESG data collection efforts are now being used more actively. The data supports benchmarking across GPs, informs investment and portfolio decisions, and helps influence GP practices over time. ESG information is treated as an input into decision-making rather than a standalone compliance exercise.

Read the interview

Stay Tuned With 0100 in 2026!

Private markets continue to change, and the conversations around them are only getting more nuanced. We’ll keep digging into these changes through honest conversations with GPs, LPs, family offices, and operators who are navigating this market in real time.

If you’d like to stay close to these discussions and get our latest interviews, podcasts, and deep dives as they’re published, make sure to subscribe to 0100 Weekly Brief. We have many more in-depth private markets conversations ready for 2026, and we’d love to have you along.

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Winter’s rolling in, and so is that moment when everyone starts looking back at the year that just flew by.

Last week, we took a look at how Europe’s venture capital scene developed in 2025. This week, we’re keeping the momentum going and turning our attention to private equity — a market that had its own set of shifts, surprises, and standout moments.

As we wrap up the year, it feels like the right time to step back and recap the trends, pivot points, and signals that shaped European private equity. Let’s dive in.

Europe - A Magnet for Global Capital

Europe is attracting remarkable attention from global investors this year, and the story is evident from two angles. On the private-capital side, international LPs have been pouring money into European vehicles, especially infrastructure and natural-resources funds, driving commitments to a record $311 billion in the first nine months of 2025.

Firms like KKR and Blackstone have leaned into this momentum, deploying record amounts in Europe as investors look for stability, long-term assets, and better relative value than in North America.

At the same time, the private-equity landscape inside Europe tells a more nuanced story. Deal activity is strong and accelerating: Q3 PE deal value jumped more than 25% quarter-over-quarter, megadeals are back, and US sponsors are driving a large share of the biggest transactions.

Read the report

The Fundraising Pressure of 2025 and How GPs Navigate It?

The Private Equity Midyear Report 2025 by Bain & Company shows that LPs are prioritizing liquidity, even if it means accepting exits at lower valuations. A majority now prefer traditional routes such as trade sales and IPOs, while interest in continuation vehicles and other structured solutions remains limited.

The change is already visible in the market, where major players have been active sellers in secondaries, and some pensions have completed multi-billion-dollar sales to rebalance portfolios.

Despite its strong momentum, the secondaries market still represents less than 5% of private assets under management, underscoring that it cannot, on its own, resolve the industry’s broader liquidity challenges.

With distributions under pressure and some GPs still holding onto assets bought at peak valuations, many investors expect more sponsors to pursue sales at prices closer to current market reality.

Read the report

Private Markets Are Going Their Own Way

Private markets are continuing to decouple from public-market swings, with recent data showing a meaningful decline in the correlation between private assets and the S&P 500.

This decoupling is driven mainly by how private assets are valued and traded. NAVs are updated less frequently, transactions take longer, and liquidity is limited, all factors that make these assets slower to react to public-market swings.

Correlation hasn’t disappeared; it's just weakened. Private markets tend to adjust on a lag, which explains why State Street’s Private Equity Index returned 7.08% in 2024 while the S&P 500 posted 25.02%. Timing, liquidity, and exit conditions now play a bigger role, with interest rates, slower deal activity, and fewer IPOs shaping how the asset class behaves.

Despite these challenges, private markets continue to scale. UBS says the sector reached USD 14.6 trillion in AUM in 2024, and S&P Global projects it could exceed USD 18 trillion by 2027.

In Europe, BlackRock expects private assets to surpass €5 trillion by 2030, driven by strong momentum in infrastructure, private credit, and energy-transition strategies.

Read our previous analysis

More Deal Activity with Long-Term Opportunities

Private equity dealmaking picked up speed in the third quarter of 2025. Global PE deals reached a record US$310 billion across 156 transactions, helped by a handful of very large buyouts.

Better economic conditions, rising stock markets, lower inflation, and growing confidence that interest rates will fall in 2026 helped push activity higher.

One of the most significant changes this year has been the smaller valuation gap. For more than two years, buyers and sellers struggled to agree on price. Now, two-thirds of GPs say that the gap has narrowed, making it easier to get deals done. To keep transactions moving, firms are also using more flexible deal structures, like earnouts or tariff-related protections.

Investor interest has also changed. With new tariffs and macro uncertainty earlier in the year, more capital flowed into sectors seen as steadier or less exposed to global trade issues. Healthcare, financial services, infrastructure, and other essential services all attracted fresh attention.

On the exit side, activity received a meaningful lift. PE firms announced around US$470 billion in exits so far this year, up roughly 40% from the same period in 2024.

LPs are still applying liquidity pressure; most GPs rate the pressure between 6 and 8 on a 10-point scale, but the improved exit market is helping. The IPO window also reopened slightly, with more than US$18 billion raised from PE-backed listings.

Read the report

Market Insights to Watch in 2026

A recent UBS report on The Year Ahead: global trends influencing private markets heading into 2026, with government debt, geopolitics, and AI-driven productivity at the center of the discussion.

Government debt levels in major developed economies continue to rise, driven by fiscal spending, aging populations, and slower growth. Many countries are already approaching “escape velocity” in terms of debt-to-GDP, and without meaningful policy modifications, debt obligations are expected to rise further.

At the same time, deglobalization remains an influential factor. Trade policy, domestic politics, and geopolitical tensions, along with the potential re-emergence of frozen conflicts, are creating persistent uncertainty.

Against this backdrop, investors are debating whether the combination of AI innovation, fiscal support, and easier monetary policy could help the economy break out of the traditional cycle of slowdowns and recoveries.

AI is seen as a potential catalyst for long-term productivity gains, though actual outcomes will depend on investment, regulation, and the energy capacity needed to support rapid adoption.

Read the report

On the other side, the pace of AI development is making investors nervous, according to Orlando Bravo and Bloomberg. He describes the anxiety in private markets as “enormous,” driven by uncertainty over which AI companies actually have staying power.

Firms are scrambling to pick winners, and the fear of missing out is leading some to take risks they may later regret.

📄 Interview | How Schroders Capital Is Bringing Flexibility and Simplicity to Private Markets

As private equity firms work through a year of tighter liquidity, slower fundraising, and more pressure from LPs, one theme keeps coming up again and again: flexibility. With distributions still lagging and many investors wanting more control over their pacing and liquidity, the industry is starting to rethink how capital is structured and deployed.

The search for flexibility is exactly why alternatives to the classic closed-end model are gaining momentum. In our recent interview with Luigi Croce from Schroders Capital, he explained how semi-liquid and evergreen funds are becoming a practical tool for LPs who want quicker deployment, smoother exposure, and more predictable liquidity.

These vehicles won’t replace traditional funds, but they’re becoming an increasingly important part of the toolkit, especially in a year when capital calls, exits, and portfolio pacing look very different from earlier cycles.

Read the interview

This week, we’re taking a look at how private markets are starting to move differently from public stocks, and why that matters.

According to the PitchBook Q2 2025 Private Capital Indexes, the rolling five-year correlation between private-market assets and the S&P 500 has been dropping.

This means areas like private equity, venture capital, real assets, and private debt are now less connected to the ups and downs of public markets. It’s an important trend that’s changing how investors think about diversification.

For a long time, investors thought private markets moved just like public stocks, only slower and harder to trade. But that’s changing. Private assets tend to move more steadily because their values are updated less often, and they don’t react to daily market swings.

The UBS 2025 Private Markets Outlook notes that private NAVs are typically updated quarterly, helping smooth out short-term ups and downs. This makes them more stable during market shocks — as shown in the chart below, private equity losses are generally smaller and less volatile than in public markets.

Lower correlation brings better diversification, but it also changes expectations. If public markets drop quickly, private assets may hold steady for a while before adjusting later when valuations catch up. So while this decoupling can help smooth out volatility, it also requires patience and a clear understanding of liquidity needs.

The New Dynamics of Correlation

Private and public markets are still connected, but not as closely as before. PitchBook’s data shows that this link, or correlation, was strongest in 2020 and 2021, and has been falling since.

That’s because private markets move on a different timeline, deals take longer, valuations are updated less often, and investments are harder to trade. All this makes them react more slowly to daily ups and downs in public stocks.

That said, the link isn’t gone.

For example, the State Street Private Equity Index, which tracks private equity, private debt, and venture capital, returned 7.08% in 2024, while the S&P 500 gained 25.02% in the same year. That’s one of the biggest gaps seen in years and shows that private markets often react later — they don’t fall or rise as fast as public markets.

So yes, correlations are falling, but they haven’t disappeared. Investors and fund managers should pay attention not only to correlation levels but also to timing, liquidity, and broader market conditions. Interest rates, deal flow, and exit opportunities all play a role in how private markets behave.

What’s driving the changing correlation?

Several underlying factors are contributing to why private-market asset classes (such as private equity, real assets, and private debt) are showing lower correlation with public markets than they used to:

Valuation and liquidity mechanisms.

Private assets are typically valued less frequently (e.g., quarterly) and are less liquid than public equities, meaning they react differently (and often more slowly) to market shocks.

For example, MSCI research shows that private equity has a “moderate” correlation with public equity.

Macro and structural tailwinds specific to private assets.

Many private-market opportunities are driven by operational transformation, niche sectors, or illiquidity premia.

According to the Schroders Capital “Private Markets Investment Outlook Q4 2025”, attractive opportunities include “domestic exposures … innovation, transformation … downside resilience … reduced correlation to public markets through idiosyncratic drivers”.

Changing deal-, exit- and fundraising dynamics.

The environment for private markets has shifted, with slower exits, fewer IPOs, more continuation vehicles, and increased secondary market activity.

The Goldman Sachs Asset Management 2025 Private Markets Survey found that 82% of LPs were optimistic about private equity, and 30% of GPs expect increased use of alternative structures, such as continuation vehicles.

Macro-regime change.

Higher and more volatile interest rates, inflation, geopolitical risk, and trade policy all alter the backdrop in which both public and private markets operate.

The McKinsey & Company 2025 Global Private Markets Report shows that private markets have faced the “rapid run-up in global interest rates from 2022 to 2023 (more than 500 bps in the U.S.)” which “shook private equity to the core”.

What This Means for Investors

For portfolio builders, these changes create both opportunities and new challenges. Lower correlation means that adding private assets can help reduce portfolio volatility and improve long-term returns.

According to UBS, total global private-market assets under management reached USD 14.6 trillion in 2024, with private equity making up ~65% (USD 9.5 trillion), real assets ~24% (USD 3.5 trillion), and private debt ~11% (USD 1.6 trillion).

Because private markets move differently from public stocks, adding them to a portfolio can help smooth out ups and downs and improve long-term returns.

Valuations get updated less often, money stays locked for longer periods, and it’s harder to get out quickly if needed. Also, S&P Global notes that private markets are projected to grow to more than US$18 trillion by 2027.

Europe’s Private Markets Cross a New Threshold

According to an article published by Bloomberg, BlackRock highlighted yesterday that European private assets are on track to surpass €5 trillion by 2030, driven by rapid growth in infrastructure, private credit, and energy transition strategies. The firm noted that infrastructure fundraising alone hit €55.4 billion in the first half of 2025, outpacing all other asset classes.

As Gonzalo García from BlackRock’s Global Infrastructure Partners put it, this expansion is being driven by the “once-in-a-generation transformation of the energy ecosystem”, along with digital infrastructure, supply chain rewiring, and the modernization of aging assets.

Private credit is also gaining ground, with BlackRock expecting the asset class in Europe to almost double to over €800 billion by the end of the decade. More than 90% of companies in Europe and the UK with annual revenues above $100 million remain privately owned, underscoring the scale of the opportunity.

Private Equity Keeps Buying: Permira Takes JTC Private

In a sign of renewed confidence in European valuations, Permira has agreed to acquire JTC Plc for £2.3 billion, offering a 37% premium to the company’s pre-announcement share price.

JTC — a London-listed fund administration and corporate services provider with clients across private equity, real estate, and venture capital is set to be taken private by a consortium led by Permira and the Canada Pension Plan Investment Board.

The move highlights how UK-listed mid-caps remain attractively priced for buyout firms and continues a broader trend of take-private deals in Europe, as private capital seeks long-term value away from volatile public markets.

Join us at 0100 Europe 2026!

0100 Europe 2026 is coming back to Amsterdam on April 22–23, bringing together more than 800 investors, fund managers, family offices, and industry leaders from over 50 countries.

The theme, “Steering Through the Liquidity Squeeze,” focuses on how private market players are dealing with slower fundraising and tighter cash flow. With 130+ expert speakers, including top names from EIF, B Capital Group, and Global Ventures, the event will explore market trends, new financing options, and more resilient investment strategies.

Register your interest

🌍 Across the Ecosystem | News & Useful Resources for You

Everyone in private markets is talking about how the gap between public and private assets is reshaping global investing. As correlations fall and valuations move on different timelines, investors are rethinking how to balance long-term growth with short-term volatility.

Across Europe, fund managers are paying close attention to this shift. Many are exploring how digital tools, new liquidity solutions, and secondary markets can help bridge the divide between public and private assets.

As 2026 approaches, the big question isn’t whether private assets will decouple further; it’s how investors will adapt to a world where stability and flexibility matter as much as returns.

📄 Article | Tech stocks suffer worst week since April after $800bn AI sell-off

Tech stocks took a major hit this week, losing around $800 billion in market value amid growing concerns about high valuations and a slowdown in the US economy. Big names like Nvidia, Meta, and Oracle saw steep declines, dragging the Nasdaq down 3%—its worst performance since April.

Analysts warn that the huge, debt-fueled spending on AI infrastructure is starting to look like the early 2000s tech bubble, with even retail investors sitting out the dip for once.

Read more

👀 Opinion | Private Is Becoming Public… Will They Live Happily Ever After?

Private and public markets are starting to blend in ways we’ve never seen before. Once reserved for large institutions and wealthy investors, private markets are now opening up to a broader audience thanks to new financial products, digital platforms, and relaxed regulations.

BlackRock and KKR are leading this change, creating investment vehicles that let everyday investors access private equity, credit, and infrastructure deals.

Platforms like the London Stock Exchange’s upcoming PISCES system are also helping make private company shares more tradable, while technology and tokenization are lowering entry barriers and improving liquidity options.

Read more

👀 Opinion | Private Markets Are The New High-Growth Public Markets

In his post “Private Markets Are the New High-Growth Public Markets,” Andreessen Horowitz partner David George explains how private markets have become the real engines of growth in tech. Once small and specialized, private tech companies now represent trillions in value, about 15% of the Nasdaq’s total market cap, or closer to 40% if you exclude the “Magnificent 7.”

These companies are growing faster and staying private longer, with over 1,300 “unicorns” worldwide and far more high-growth opportunities than in the public markets. Investors like OpenAI, Anthropic, and SpaceX are driving massive new revenue growth, while public companies in similar sectors are expanding at a much slower pace.

Read more

In today’s private equity landscape, value creation has evolved far beyond cost optimization. At Seven2, it’s about transforming strategic vision into measurable outcomes—anchored in growth acceleration, operational excellence, and sustainability.

François Candelon, Partner for Value Creation & Portfolio Monitoring at Seven2, shares how the firm aligns every investment around a clear “exit animal”—a vision of the company at exit—and uses disciplined execution, AI-driven transformation, and sustainability as levers for resilience and premium valuations. From reengineering core processes with AI to embedding decarbonization into business strategy, Candelon explains how Seven2 builds companies that are not just exit-ready, but future-proof.

Seven2 has a value-creation strategy built around growth acceleration, operational effectiveness, and sustainability. How do you prioritize among these levers when working with portfolio companies at different stages of maturity?

At Seven2, our value creation strategy is anchored in what we call the “exit animal”—a clear, shared vision of the company we want to bring to market at exit. To achieve it, strategic alignment is critical: from day one, we work hand-in-hand with management to define the equity story and the two or three key priorities that will drive value over the holding period. This ensures that our efforts—whether focused on growth, operational effectiveness, or sustainability—are always in service of the end goal and don’t overwhelm our portcos. The choice of levers is never generic; it’s a joint decision, tailored to the company’s maturity and the strategic path to the exit animal. This alignment allows us to move quickly, stabilize performance, and then refocus on growth, always with the exit in mind. Our approach is systematic yet customized: we implement the fundamentals—governance, leadership assessment, reporting tools, cybersecurity, and sustainability—within the first year, then launch thematic programs based on the company’s unique needs. This discipline, combined with our ability to anticipate sector shifts, ensures we create resilient, scalable businesses that are ready for premium exits.

When it comes to growth acceleration, what patterns have you seen that distinguish high-performing portfolio companies in the tech and B2B service sectors from the rest?

High-performing companies consistently demonstrate ambition paired with clarity, but what truly sets them apart is the curiosity of their management teams and their openness to constructive challenge. This is a critical part of our assessment, even before we invest. We look for leaders who are not only bold in their vision but also eager to learn, adapt, and be challenged. These teams are agile, data-driven, and quick to institutionalize lessons. They excel at scaling proven models and expanding into new markets, but above all, they combine a strong sense of purpose with the humility to question their own assumptions and the discipline to execute at speed. This blend of ambition, curiosity, and resilience is what drives sustainable growth and sets high performers apart.

AI-enabled transformation is becoming a major driver of value creation. How is Seven2 leveraging AI to enhance portfolio monitoring, decision-making, and overall company performance?

AI is at the heart of our value creation strategy. Our approach is pragmatic: we focus on “putting money in the bank” by hunting elephants, not rabbits—targeting large, transformative processes whose reengineering, powered by AI, can materially impact EBITDA, rather than scattering resources on small pilots. For example, we have reengineered core processes with AI, targeting significant EBITDA increases and launching AI-powered features that deliver clear, measurable value to customers and drive recurring revenues. We remain at the frontier of AI adoption: I personally stay connected to the latest developments as an Executive Fellow at Harvard and a member of the American Society for AI, and Seven2 is the first benefactor member at Hub France IA. Every year, we assess the AI maturity of our portfolio companies using the Hub France IA framework and develop customized roadmaps to ensure all are AI-ready at exit. Currently, we are making a strong effort on Agentic AI—not just to automate tasks, but to become the operating system of companies, orchestrating workflows and enabling cross-functional collaborations. This positions our portfolio to capture the next wave of AI-driven value creation.

Sustainability is now integral to value creation. How do you embed decarbonization and CSRD compliance into portfolio strategies without compromising financial returns — particularly in high-growth-potential companies?

Sustainability is at the heart of what we do at Seven2. For us, it’s not a trade-off, but a strategic driver of both resilience and growth. We embed decarbonization and CSRD compliance into our portfolio strategies from day one, identifying the material priorities for each company—whether that’s enriching products and services, decarbonizing operations, or strengthening human resources.

Our experience shows that these initiatives do not compromise financial returns; in fact, they often enhance them. For example, Routin became a sustainability champion during our investment, achieving SBTi commitment, platinum EcoVadis, and B-Corp certification, and was ultimately sold at a premium to an Article 9 fund after a highly competitive process.

We ensure that every sustainability initiative is tied to a clear business case and long-term value creation. By making sustainability a source of competitive advantage, we help high-growth-potential companies not just comply, but lead in their sectors—delivering both impact and strong financial performance.

In a challenging exit environment, how do you prepare portfolio companies to remain attractive to buyers when markets are slower and valuations more conservative?

In today’s uncertain environment, resilience and adaptability are critical. We insist on annual Portfolio Company Updates to benchmark progress against the exit plan and review strategic priorities a couple of years before exit, allowing us to adapt to externalities and ensure the company remains on track. Our active governance process includes “corkscrew sessions” for rapid diagnosis and corrective action if we detect deviations from plan. This discipline, combined with a focus on building robust, future-proof businesses, ensures our companies are well-positioned to attract buyers even in conservative markets. We also emphasize the importance of speed—rapid diagnosis, quick alignment, and fast execution—so our companies can pivot quickly and seize opportunities as they arise. Ultimately, our goal is to build companies that are not only resilient but also positioned for premium valuations, regardless of market conditions.

Looking ahead, which emerging themes or technologies do you believe will redefine how private equity creates value over the next five years?

AI will be the main source of competitive advantage in the next five years. We are already seeing a fundamental shift: companies that master AI-driven process transformation and business model innovation will separate themselves from the pack. At Seven2, we make AI the core of our value creation plans, ensuring our portfolio companies are not just adopting AI, but using it to fundamentally reshape their operations and value proposition. This, combined with our continued focus on sustainability and strategic alignment, positions us—and our companies—to lead in the next era of private equity. The future belongs to those who are bold enough to blend technology, sustainability, and ecosystem strategies into their investment DNA. At Seven2, we are committed to leading this shift and helping our portfolio build competitive advantage for the next decade, not just the next quarter.

This week in the 0100 Weekly Brief, we’re diving into one of the biggest changes happening in private markets today: the impact of artificial intelligence in private equity.

What once sounded visionary is now becoming a tangible driver of deal flow, decision-making, and portfolio performance. According to the latest market reports, AI is a tool investors are actively using to make smarter decisions and unlock new sources of value.

The numbers tell the story: The Silicon Valley Bank found that capital call activity among tech-focused funds has jumped 65%, showing that investors are pouring money into AI-related opportunities at a pace that far exceeds other sectors.

At the same time, nearly all private equity firms are now exploring AI tools, with the biggest players already integrating them into daily operations. Many are using AI to improve deal sourcing, automate due diligence, analyze portfolio data faster, and even predict performance before it happens. For fund managers, this means AI isn’t just an operational helper; it’s becoming a core part of how they create value.

But how much value is it really creating so far?

Bain & Company offers us some perspective. Almost 20% of portfolio companies are already seeing measurable business impact from generative AI — things like cost reductions, productivity gains, and faster product development.

Another 32% are actively testing or developing AI use cases, showing strong momentum toward adoption. Looking ahead, over half of investors (57%) expect significant value from AI within five years, making it one of the most promising growth areas in private markets.

Of course, the road isn’t without bumps. Investors admit they’re still figuring out how to measure AI’s real impact. The top challenges? Limited use cases, lack of technical expertise, and unclear governance.

As a result, due diligence standards are getting tougher.

Investors are now digging deeper into how target companies use AI, not just what tools they have, but whether they have the right data infrastructure, leadership commitment, and risk controls in place. While most investors want companies with strong AI readiness, very few actually find those conditions during due diligence.

AI’s growing influence is also changing how PE firms operate day to day.

Across the industry, firms are using AI and machine learning to speed up due diligence, identify deals faster, and monitor portfolios in real time. According to the World Economic Forum, over 80% of private equity workflows already rely on these technologies, and nearly all firms plan to increase their AI investments within the next 18 months.

PE firms are also leaning on AI to navigate uncertainty and target opportunities more precisely. The technology is also reshaping exit strategies, with secondary and leveraged buyouts leading the way, followed by private sales and IPOs.

Deep Dive into AI at 0100 International

Coming soon at 0100 International in Milan, we have a conversation diving deeper into the influence of AI in the investment landscape. While everyone agrees AI offers incredible opportunities, the discussion also dives into the realities, how to find the right deals, balance risk with reward, and make smart calls in a space that’s moving faster than ever.

Joining the conversation are seasoned leaders from across the global investment landscape: Matt Russell of VenCap, Shu Nyatta of Bicycle Capital, Christoph Klink of Antler, Stephan Wirries of Ventech, Johannes Blaschke of Calm/Storm VC, and Philippe Thomas of Vaultinum.

Learn more

📝 Expert Round-up | How CAPZA is turning Italy’s small and mid-market into a growth engine for European private capital

Just as AI is helping investors identify opportunities and manage portfolios more efficiently, CAPZA is using insight and flexibility to unlock value in overlooked parts of the market. Italy’s vibrant ecosystem of family-run SMEs, especially in digital, healthcare, and business services, is creating fertile ground for this kind of smart, hands-on investing.

With Milan emerging as a new European financial hub, and technology driving more of the deal-making process, CAPZA’s approach shows how innovation — whether digital or strategic — is powering the next chapter of European private equity growth.

Read the interview

🌍 Across the Ecosystem | News & Useful Resources for You

Everyone in private equity is talking about AI right now — and for good reason. From finding deals faster to improving due diligence and managing portfolios, AI is changing how investors work and make decisions. Governments and industry leaders are also looking at how technology can boost growth and make private markets more efficient and transparent.

Here’s a look at what’s happening across the industry:

🗞️ News | Mega AI deals enable exits for private equity

The boom in AI-driven companies is giving private equity firms new ways to exit investments, especially through IPOs and acquisitions, as stock markets rally around artificial intelligence. According to CNBC, the surge in AI deals has reopened exit channels that were mostly closed over the past year, offering much-needed liquidity for investors.

But alongside the excitement, many in the industry are warning of a growing “AI bubble.” Some investors say parts of the market are becoming overheated, with valuations rising faster than real profits. As a result, more cautious firms are focusing on AI businesses with proven revenue and strong fundamentals, rather than chasing hype.

Read the article

🗞️ News | How Private Equity Firms Are Creating Value with AI

A new Harvard Business Review article explains how private equity firms are using AI to create value faster in their portfolio companies. Since PE firms usually aim to buy, improve, and sell a company within five to seven years, they’re turning to AI to speed things up.

More firms are also now hiring AI experts or teaming up with tech partners to make these tools part of their everyday process.

Read the article

🎤 The Private Equity Podcast | How AI and Product Strategy Are Reshaping Value Creation

In this episode of The Private Equity Podcast, host Alex Rawlings sits down with David Rowley, Operating Partner at Diversis Capital, to talk about how AI and strong product strategies are changing value creation in private equity.

David also dives into how AI is reshaping product development and innovation. He also compares today’s AI revolution to the rise of agile methods in the early 2000s, both forcing companies to think faster and smarter.

Listen to the episode

With rising interest rates and tighter liquidity conditions, Limited Partners (LPs) are rethinking how they access and manage their exposure to private markets. Rather than a shift in expectations, what’s emerging is an evolution—toward more flexible structures that allow for efficient capital deployment and greater control over liquidity.

In this interview, Luigi Croce, Investment Manager at Schroders Capital, explains how semi-liquid and evergreen fund models are gaining traction among sophisticated investors. Drawing on Schroders Capital’s early experience with these vehicles, Luigi highlights the drivers behind their growing popularity, from regulatory evolution and proof of concept to the increasing demand from private wealth and institutional investors seeking smoother capital management and continuous compounding.

With interest rates elevated and liquidity tighter, how do you see LPs’ expectations shifting when it comes to accessing private markets?

LPs expectations are not necessarily shifting but evolving and making use of the tools available to them. With an increased cost of capital, LPs are paying attention to efficient use of capital, and this includes deployment speed and how to put capital to work quickly but in a controlled, diversified way.

Additionally, with the tightening of liquidity in the broader private equity landscape, LPs are more sensitive to exits and, in some cases, seek to have more control over the liquidity they can generate from their holdings if necessary.

All these points are pushing sophisticated LPs to look at semi-liquid evergreen funds as a viable addition to their private equity allocations. These funds allow immediate capital deployment into diversified portfolios and provide them with flexibility to adjust their exposure on a quarterly basis (typically).

From your vantage point at Schroders Capital, what is driving the shift from traditional drawdown funds to semi-liquid and evergreen vehicles, and why is this momentum stronger now than in past cycles?

At Schroders Capital, we have been one of the early providers of semi-liquid evergreen private equity funds, with our first offering launched in 2019 already. With over 6 years of experience with these types of funds, we have observed this trend firsthand. For the last 4 years, we have observed a strong fundraising moment for our semi-liquid evergreen vehicles. This trend comes from several factors:

1. Proof of concept: while 6 years ago these types of funds were less common and felt unproven to some LPs, they have now become a proven structure that delivered on both performance and liquidity in what has been a volatile market since the COVID pandemic. The fact that more and more private equity providers are offering these structures is only further proof of that.

2. Regulation. Regulation has played a role in making those vehicles eligible to a wider range of investors, with the European ELTIF regulation and the UK LATF regulation for example, allowing retail investors to access the asset class via evergreen funds.

3. Structural market reasons explained above.

What do semi-liquid or evergreen funds solve for LPs that traditional closed-end funds cannot?

As mentioned above, the main advantage of these funds is the flexibility they provide LPs with. They allow to deploy capital quickly in a diversified, controlled way and adjust exposure when needed. This is very beneficial for a number of LPs who seek to manage their exposure to the asset class.

What is also not to be underestimated is the ease of operation that comes with these funds; they have an ISIN and can essentially be traded like any other mutual fund commonly used in listed markets. The operational burden is almost eliminated. The subscription is very simple. The single capital call/immediate capital deployment means no complicated cash flow management. The evergreen nature and reinvestment of underlying distributions embedded in the product also mean continuous compounding with no more commitment planning and complicated modelling to estimate long-term NAV exposures.

In summary, they provide increased flexibility and are easy to operate.

How do these structures balance the promise of periodic liquidity with the need to preserve the long-term nature of private equity investing?

The key to this balance is sound liquidity management on how the portfolio is constructed, what liquidity is offered under what conditions.

For example, at Schroders Capital, we keep 10-20% of our evergreen portfolios in cash/Money market funds. This means that we always have at least 10% of the portfolio that can be used to serve redemptions at any point in time.

It is also worth noting that these funds don’t offer unlimited liquidity. Typically, net outflows are limited to 5% of a total fund’s size on a quarterly basis. This means that if subscriptions outpace redemption, there is no problem for the fund to provide the liquidity, but if redemptions are larger than subscriptions received, then they are limited to 5% of the fund size. This rule ensures that these funds can deploy capital into private equity investments, knowing that the liquidity they have to provide is limited and controlled.

The global market for indefinite-life funds is already around $2.7 trillion, projected to grow to $4.4 trillion by 2029. What’s fueling this momentum?

It has been widely reported that the main driver is private wealth seeking to get exposure to the asset class, and with appropriate vehicles and regulations in place to allow for that, this is now starting to happen and is expected to continue as financial advisors and private banks are adopting it. On our end, we also see about 20-25% of that growth coming from sophisticated institutional LPs that choose these funds on top of their traditional closed-ended funds for all the reasons mentioned above.

Evergreen funds offer immediate exposure and continuous compounding, while drawdown funds take years to deploy capital. How should LPs think about incorporating evergreen structures into their broader allocation strategies alongside vintaged funds?

What we observe is that sophisticated LPs use evergreen funds to manage their exposure. For example, we see a number of our LPs using these funds to ramp up their exposure to the asset or even catch up if the deployment of their classic drawdown was slower than expected. Some also use it as an overlay, providing them with more liquidity and flexibility. Essentially, allowing them to reduce their exposure to the asset class if their drawdown funds outperform their NAV target, and in some cases, may take longer to return capital. In summary, many of our LPs see it as a valuable addition to their portfolio management toolkit.

Looking ahead, do you see evergreen funds as a complementary tool to traditional drawdown vehicles, or could they eventually reshape the private equity model entirely?

As just mentioned, we see these funds as complementary. We believe both structures have a good reason to exist and be used. With drawdown funds being perfectly appropriate to the long-term nature of the asset class, and evergreen funds adding a layer of flexibility.

Luigi Croce, will join 0100 International as a speaker on the panel “The Rise of Semi-Liquid & Evergreen Funds — Growing Benefits and Flexibility for Private Markets”, along with Senia Rapisarda (Managing Director, HarbourVest Partners), Shaha Miah (Principal, Pantheon), and Federico Pavoncelli (Principal, StepStone Group). The session will be moderated by Diego Braguglia, Managing Partner at Vi Partners,

We’re entering a new phase in private equity. ESG reporting is no longer just a nice-to-have. Clear, consistent, and verified sustainability data now plays an important role in how capital is allocated and how fund performance is evaluated.

Private equity firms have already been experimenting with ESG disclosure for several years, but the difference now is that they (and their LPs) are starting to make sense of the data.

According to McKinsey’s Global Private Markets Report 2025, after two years of decline, private equity deal value rebounded by 14 % in 2024, reaching about $2 trillion. That recovery shows us how firms are doubling down on performance levers, not just financial engineering, but operational improvements, risk management, and selective capital deployment.

But this changes are not taking place without seeing major friction. Many firms still face challenges in:

• Data fragmentation and comparability — ESG metrics are reported under different frameworks, with divergent assumptions and estimation approaches.

• Assurance and verification gaps — third-party audit or assurance of ESG disclosures remains limited, especially for private portfolio companies.

• Causal linkage to value levers — it remains difficult to trace how ESG improvements translate into revenue growth, margin expansion, or reduced capital cost.

• Resource constraints & scale — building systems, processes, and expertise takes investment and discipline, especially in smaller firms or markets.

That’s why this week, we’re discussing ESG reporting in private equity — not just as a compliance box to check, but as a bridge to genuine value creation. We’ll explore how firms are evolving, identify the biggest gaps that remain, and discuss how to move beyond reporting toward measurable, strategic impact.

A clear example of this can be seen in our most recent interview, “Two-Track ESG: How Norvestor Turns Compliance into Value Creation.”, with Norvestor, which we invite you to discover below.

The ESG Reporting Moment

According to an EY-Parthenon analysis, funds that have deeply integrated ESG practices into their operations can achieve internal rates of return (IRR) up to eight percentage points higher than peers who treat it as a side function.

The change is happening because ESG factors are now influencing everything from how deals are sourced and evaluated to how value is created and realized at exit.

The real opportunity lies in integrating ESG into every stage of the investment lifecycle, not just the annual report. Embedding ESG principles into deal origination, due diligence, and post-acquisition plans enables firms to identify risks earlier, spot growth opportunities, and create stronger, more resilient companies.

Investors are also rewarding those efforts: companies with strong ESG credentials are increasingly seen as lower-risk and higher-potential assets, often commanding better valuations and smoother exits.

From Regulation to Opportunity

With new EU regulations, such as the CSRD, now taking shape, and limited partners (LPs) requesting more precise, more consistent data, ESG reporting has evolved far beyond simple compliance. It’s becoming a measure of how credible and future-ready a fund really is.

Investors are increasingly viewing strong ESG reporting as a sign of disciplined management, lower risk, and better long-term performance, turning transparency itself into a genuine competitive advantage.

The ESG Data Convergence Initiative (EDCI) is also one of the key efforts driving this forward; it aims to standardize ESG metrics across private equity, enabling LPs and GPs to benchmark and compare performance more meaningfully.

Under EDCI, submitted data is validated, run through consistency checks, and benchmarked against peers to flag anomalies.

But it’s no small task for mid-market GPs. Cost pressures, data gaps, and portfolio heterogeneity make it tough to collect, standardize, and assure ESG metrics. To bridge those gaps, many firms are now adopting digital ESG platforms and data management tools.

These systems automate data collection, perform validation checks, integrate with APIs, and provide dashboards to monitor progress. Alongside that, external validation, via auditors or assurance providers, is becoming more common, as it helps build credibility with LPs and reduces investor skepticism.

ESG as a Value Driver

Norvestor is one of the leading private equity firms in the Nordics, with over 30 years of experience in building regional champions across sectors. Rather than treating ESG as a reporting obligation, Norvestor uses it as a practical framework to strengthen operations, reduce costs, and future-proof portfolio companies.

According to their latest Sustainability Report, in 2024 alone, their portfolio reduced total carbon emissions by 18% compared to the previous year—a result of concrete actions, including improved data quality, targeted efficiency measures, and enhanced carbon management.

Norvestor’s approach is built on the idea that responsible business is smart business. Each portfolio company undergoes a double materiality assessment to identify sustainability topics that are both financially and socially significant. This process helps uncover risks early — from supply chain vulnerabilities to regulatory exposure — while also revealing growth opportunities such as circular models, energy efficiency, or digital innovation.

The firm’s use of third-party assurance under ISAE 3000 adds another layer of credibility, giving investors confidence that ESG data is accurate and decision-useful.

Two-Track ESG: How Norvestor Turns Compliance into Value Creation

Norvestor’s Head of Sustainability Fredrik Franke, who joined in 2024 after 25+ years in sustainability and a stint at BCG, explains how the Nordic-rooted PE firm turns ESG into enterprise value.

With €6.3–6.4bn AUM, ~35 portfolio companies, and a track record of ~100 control investments, 60–65 exits, and 15–16 IPOs, Norvestor’s latest consolidated report shows real progress: credible Scope 1–3 data across SMEs and a year-on-year emissions decline despite acquisitions.

Franke details a two-track approach:

1. exit-readiness/compliance and

2. commercial levers like tire retreading (up to 4×, ~75% lower carbon).

He also outlines standardization on VSME Comprehensive (CSRD for bond issuers), double materiality for all, Article 8 funds, intense LP scrutiny (1,200+ DDQ questions), rapid take-up of SPV3 (~€3bn), and the firm’s expansion beyond the Nordics into Germany and the UK.

Read the article

Deep Dive into ESG Reporting at 0100 International

In a world defined by geopolitical tension, supply chain instability, and diverging regulations, ESG has moved well beyond policy checklists. At 0100 International, we’ll look at how top firms are adapting — integrating ESG into investment decisions, enhancing value creation, and staying aligned with evolving LP expectations.

The discussion brings together two seasoned sustainability leaders: April Tissier, Sustainability Director at Ardian, and Noëlla de Bermingham, Chief Sustainability Officer at Andera Partners. Both bring deep experience in embedding ESG at the heart of private equity strategy. From reporting and regulatory frameworks to portfolio transformation and investor engagement, they’ll share how their firms are navigating this complex landscape.

Learn more

🌍 Across the Ecosystem | News & Useful Resources for You

We’re not the only ones rethinking what ESG reporting really means in private equity today. With new regulations coming into force, LPs demanding clearer disclosures, and managers under pressure to prove measurable impact, the conversation around transparency, accountability, and long-term value creation is gaining real momentum across Europe and beyond.

Here’s a spotlight on the perspectives shaping how private equity firms are redefining ESG reporting — turning it from a compliance task into a core part of how they build trust and deliver performance.

📄 Article | How ESG due diligence is influencing private equity deal-making

Today, funds that incorporate ESG principles into their investment processes are outperforming their peers in both financial and operational terms. According to a 2024 ESG report, 73% of private equity investors have already implemented robust ESG frameworks, and funds with strong sustainability practices are seeing higher valuations at exit — especially those qualifying under Article 8 and 9 of the SFDR.

Many firms are also leveraging climate risk assessments and digital tools to enhance transparency, streamline reporting, and meet growing LP expectations.

Read the article

🗞️ News | World’s biggest pension fund puts impact investing on the agenda

Japan’s $1.8 trillion Government Pension Investment Fund (GPIF) is setting a new precedent by putting impact investing on its agenda.

The fund’s exploration of impact strategies has already prompted several other major Japanese pension funds to update their own policies, signaling a broader change across the country’s $5 trillion asset management industry. The government is backing this approach as part of a national strategy to address social challenges, including climate change, healthcare, and inclusivity in an aging population.

Read the article

📄 Article | How investors are adapting ESG policies on defence

European investors are reassessing their ESG policies in response to shifting global priorities driven by geopolitical tensions and security risks. Once excluded from most sustainable investment strategies, the defense sector is now being reconsidered under a new lens, one that balances ethical concerns with the need for national and regional security.

Major LPs and GPs across Europe, including those in Finland and Denmark, are updating their ESG frameworks to allow for selective exposure to defense-related assets, provided these assets align with responsible investment principles.

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Norvestor’s Head of Sustainability Fredrik Franke—who joined in 2024 after 25+ years in sustainability and a stint at BCG—explains how the Nordic-rooted PE firm turns ESG into enterprise value. With €6.3–6.4bn AUM, ~35 portfolio companies, and a track record of ~100 control investments, 60–65 exits and 15–16 IPOs, Norvestor’s latest consolidated report shows real progress: credible Scope 1–3 data across SMEs and a year-on-year emissions decline despite acquisitions. Franke details a two-track approach—(1) exit-readiness/compliance and (2) commercial levers like tire retreading (up to 4×, ~75% lower carbon). He outlines standardization on VSME Comprehensive (CSRD for bond issuers), double materiality for all, Article 8 funds, intense LP scrutiny (1,200+ DDQ questions), rapid take-up of SPV3 (~€3bn), and the firm’s expansion beyond the Nordics into Germany and the UK.

Norvestor released its 2024 Sustainability Report just before the summer. What does “progress” look like for you—beyond publishing the document?

We publish a consolidated report—covering both the fund manager and all portfolio companies—and have done so for four to five years, evolving the structure every cycle. Two things matter most: (1) measurable improvement on key metrics and (2) the maturity of portfolio companies in collecting credible data. Several had never measured emissions before; getting reliable Scope 1–2–3 numbers across SMEs is an achievement in itself. Notably, total emissions fell this year, which is significant because acquisitions usually push the aggregate up.

Give us the firm snapshot today.

Norvestor was founded by two Norwegian partners in 1989–90. Over time we have completed ~100 control investments, ~60–65 exits, ~15–16 IPOs, and ~500–600 add-ons. We manage €6.3–6.4bn AUM across ~35 portfolio companies, with an advisory team of 55–60 professionals. Our latest flagship is Fund IX, and this year we also launched Nova (a smaller tech-oriented fund) and SPV3, a continuation vehicle that moved prior assets—three funds raised recently. We’re Nordic-rooted but expanding: portfolio companies now also in Germany and the UK, with add-ons in France and Spain; we’ve opened a Berlin office.

Does “being Nordic” still confer an ESG advantage?

Historically, yes—culture and earlier environmental laws helped. But EU regulation has leveled the playing field. Some of the most demanding LPs on sustainability are now French, Dutch, and Swiss institutions, and maturity among the SMEs we back isn’t meaningfully different from continental peers.

How does sustainability plug into value creation—beyond compliance?

Our playbook has three pillars: buy-and-build, a digital agenda (from basic data/Cloud hygiene to advanced go-to-market), and sustainability. On sustainability, we run two tracks in parallel:

1. Exit-readiness and compliance (policies, permits, ESG programs, and robust reporting), and

2. Commercial levers tied to the business model.
Example: a Nordic bus & truck tire retailer where we’re scaling retreading—you can retread up to four times, cutting ~75% of the carbon versus a new tire. That’s a circular shift and a revenue driver.

Where in the deal cycle do you find those levers?

We still do risk-based ESG due diligence, but we increasingly infuse sustainability into commercial DD—double-clicking on market shifts (climate, social, regulatory) that can expand revenue or margin. With Avanova (occupational/adjacent public healthcare services for corporates), the material “S” angle is central to growth; in other tech assets, climate may dominate less. The point is to bake the levers into the business plan from day one.

How is the sustainability function organized at Norvestor?

We’re about 60 people firm-wide, with two full-time on sustainability. We own compliance and reporting, and act as catalysts with the investment teams so opportunities aren’t missed. Sometimes management already sees the angle; sometimes we help surface it.

Reporting frameworks in Europe are moving targets. What’s your approach for SMEs?

After a messy year—CSRD prep, the Omnibus Simplification debate—we decided to standardize: all portfolio companies will report under VSME (Voluntary SME) Comprehensive going forward; a handful with publicly traded bonds will do CSRD. Regardless, we perform a Double Materiality Assessment (DMA) for every company because it’s a strategic tool to focus on what’s truly material. Over time, the compliance side becomes routine—like GDPR did—so more management attention can shift to value creation.

Is there tension between compliance reporting and value creation?

Not in principle—but attention can drift toward reporting “noise.” Consultants and news cycles can over-weight compliance. The fix is governance: get the baseline done efficiently, then focus leadership time on a small set of material themes with commercial upside. That’s exactly what double materiality was designed to encourage.

How do you think about SFDR classification and “impact”?

Since Fund VIII, our funds are Article 8. We considered Article 9 but held off: it narrows the investable universe and adds heavy ex-ante impact evidence and reporting. Our LPs are satisfied with Article 8, and we’ve had strong demand—SPV3 (~€3bn) was fully subscribed in ~two months. We believe large transition opportunities (like the tire case) can generate outsized real-world impact—often beyond what Article 9 currently accommodates. Meanwhile, LP DDQs can exceed 1,200 questions—they’re tougher than regulators.

Who typically buys your companies, and how does sustainability factor in?

We’ve done 15–16 IPOs, but in today’s market, we mostly sell to larger PE firms that can lead the next leg—for example, U.S. expansion or deeper Southern Europe penetration. Exit-readiness on ESG is table stakes; buyers expect solid programs and trustworthy data, while differentiated sustainability levers can support thesis continuity and pricing.

Finally, where do you see Norvestor growing next?

Organically. You have to know the market to be effective in PE. We’re building capability and relationships locally (e.g., Berlin office, multiple German assets), while continuing add-ons in France and Spain—broadening beyond the Nordics without losing our roots.

In an era where high interest rates and subdued exit markets are reshaping private equity, adaptability has become a defining advantage. Investors with a focus on small and mid-market companies—where leverage is moderate, exits are more flexible, and value creation is operational—are finding themselves better positioned than those reliant on large buyouts. Few firms embody this shift as clearly as CAPZA, whose model combines flexible capital structures with deep regional expertise.

At the upcoming 0100 International conference in Milan, Stefano Zavattaro, Partner and Head of Italy at CAPZA, will share his perspective during the panel “Scaling Under Pressure — Rethinking Large Capital Buyouts in the Age of Higher Rates and Tighter Exits.”

He’ll be joined by Raffaele Legnani, Managing Director and Head of Italy at H.I.G. Capital, and Sharand Maharaj, Co-Managing Partner at MML Capital Partners, in a discussion moderated by Saverio Rondelli, CEO and Head of Italy at Lincoln International.

In this interview ahead of the event, Stefano discusses how CAPZA is navigating this new landscape—leveraging flexibility, local insight, and sustainability to scale resilient companies across Europe, with Italy playing an increasingly strategic role.

With higher interest rates and tighter exit markets, large buyouts are under stress. How is CAPZA’s focus on small and mid-market companies better suited to this environment?

CAPZA’s focus on small and mid-market companies is generally better suited to the current environment of higher interest rates and tighter exit markets compared to large buyouts, as these segments tend to offer greater flexibility, lower leverage, and adaptability for both investment and exit strategies.

Investment strategy

First of all, CAPZA’s PE funds have a very flexible mandate, which allows them to complete minority deals as well as change of control ones, also full equity or via structured equity schemes. That makes us less vulnerable to market turmoil and eventually offers us a broader spectrum of investment opportunities.

Market Dynamics and Leverage

Small and mid-market companies typically operate with lower leverage ratios than large buyouts, which reduces their sensitivity to interest rate increases. In periods of rising rates, heavily leveraged large buyouts face pressure on debt servicing and covenant compliance, while smaller deals can endure these conditions with comparatively less financial strain. CAPZA’s emphasis on moderate gearing and conservative debt structures further insulates its investments from volatility in financing costs.

Exit Flexibility and Liquidity

Unlike large buyouts, which depend heavily on public market IPOs or large trade sales for exit, small and mid-market deals present broader exit options, including secondary buyouts, sale to strategic buyers, or management buybacks. Tighter exit markets, characterized by fewer IPOs and reduced M&A activity, impact large deals severely, while the mid-market benefits from a broader buyer pool and continued private transactions even during downturns. Over the past 18 months, CAPZA has exited 5 deals from its Flex Equity 4 fund, demonstrating the flexibility and adaptability of this strategy to deliver liquidity for investors even in challenging market conditions.

Resilience and Value Creation

CAPZA’s investment model focuses on active engagement and operational improvements in portfolio companies, which is especially valuable during economic instabilities. Small and mid-market companies are more responsive to growth initiatives, cost optimizations, and management support, allowing CAPZA to unlock value and drive resilient returns even when macroeconomic headwinds slow down large-scale corporate transactions.

CAPZA now manages around €9.9 billion across six complementary strategies. Which areas are seeing the strongest momentum today, and how is Italy contributing to that growth?

CAPZA indeed manages around €9.9 billion across six complementary strategies, with private debt and flex equity showing the strongest momentum today. Italy is making a significant contribution to growth, especially in the private debt segment where CAPZA recently completed two deals. The Italian market is increasingly attractive for alternative direct lending and CAPZA’s local presence is driving increased deal flow and portfolio expansion. However, we also see a strong contribution by flex equity in the coming 12 months as pipeline fills up significantly after a softer first half of the year. Namely, we are currently negotiating a few opportunities in the Digital and Healthcare spaces.

You’ve been leading CAPZA’s expansion in Italy. What unique opportunities and challenges do you see in the Italian small and mid-market segment compared to other European geographies?

Italy’s small and mid-market segment offers several unique opportunities and challenges compared to other European geographies.

The Italian market features a vibrant SME ecosystem with strong growth potential, especially as more companies seek flexible equity capital or financing solutions outside the traditional banking sector. Italy has the largest primary market in Europe, characterized by family-run businesses affected by succession and size issues and thus particularly fit for flexible private capital solutions like ours.

Italian SMEs are particularly open to buy-and-build strategies, internationalization, and operational transformation, creating attractive conditions for investors with local presence and sector expertise. In addition, recent regulatory changes and a shift toward alternative lending have opened the market to non-bank players like CAPZA, which now provides direct lending and customized funding to Italian businesses.

While Italy’s private equity and private debt markets have historically been less mature than those in France or Germany, important progress is underway. Recent years have seen rising deal sophistication, more creative structuring, and a surge in private credit solutions that make deal execution faster and more flexible. The investor base is diversifying, thanks to regulatory reforms, growing interest from international funds, and increased allocations from high-net-worth individuals, all of which are helping to deepen market liquidity and reduce historic cyclicality. As Italy continues to attract capital—driven by attractive SME opportunities, resilience in key sectors like tech and healthcare, and a pro-business climate—challenges are steadily being transformed into catalysts for further market development.

Overall, CAPZA’s regional office and flexible approach position it uniquely to tap into Italy’s growing but underpenetrated small and mid-market, turning local complexity into a source of opportunity

CAPZA has developed expertise in sectors like health, technology, and services. Where do you see the most urgent need for capital in Italy, and how is CAPZA helping companies scale sustainably?

The most urgent need for capital in Italy is in the healthcare, technology, and business services sectors, and next-generation industrial automation. CAPZA has actively supported growth in these areas by arranging equity deals or flexible financing—including unitranche and senior debt—to drive expansion, sector consolidation, and buy-and-build strategies. For example the refinancing of F2A, a leading HR and F&A tech-enabled services provider backed by Ardian to complete a number of add-ons or the LBO of Eidosmedia alongside the existing management team to support its expansion into new verticals and markets.

Sustainable scaling is central to CAPZA’s value-add. By tailoring financial solutions and promoting responsible business practices, CAPZA helps Italian companies optimize digital transformation, implement ESG strategies, and innovate operational processes, contributing to resilient, long-term growth across its portfolio. The firm’s pan-European network ensures knowledge transfer and best practice sharing, further strengthening the sustainability of Italian businesses under CAPZA’s stewardship.

Institutional investors and family offices are rethinking their allocations, especially in private markets. What trends are you seeing among Italian LPs, and how are their priorities shifting?

Overall, the Italian LP landscape is becoming more sophisticated and outward-looking, focused on yield, innovation, and stability in a changing global environment. Italian institutional investors and family offices are actively rethinking their allocations in private markets, with notable shifts in priorities. There is growing interest in private equity, private credit, as LPs seek greater diversification, resilience, and access to high-quality assets outside traditional public markets. In addition, local private capital association AIFI, has been effectively lobbying on institutions to reduce regulatory red tape and adopt best practices to broaden the addressable LP base in Italy.

With Milan increasingly positioning itself as Europe’s next financial capital, how is CAPZA planning to leverage this momentum for its Italian and European portfolio?

Milan’s rise as Europe’s next financial capital offers CAPZA valuable access to international investors, talent, and a dynamic business ecosystem. CAPZA’s Milan office supports Italian portfolio companies with local expertise, facilitates cross-border growth for European assets, and helps structure innovative deals by leveraging the city’s favorable financial environment and regulatory improvements. This positions CAPZA to scale investments and source new opportunities across both Italy and Europe efficiently.

As everybody knows, Milan is located at the very heart of industrial Northern Italy and thus is the perfect spot to reach out to the most promising businesses.

April Tissier, Sustainability Director at Ardian, has spent the last decade at the forefront of integrating ESG across private markets. As the first full-time hire on Ardian’s sustainability team back in 2015, she now leads sustainability strategy for the firm’s secondaries, co-investments, and private credit platforms, while also spearheading its efforts in sustainability market intelligence.

In this interview, she explains how Ardian’s unique position as the world’s largest secondaries platform provides unparalleled insights into ESG practices, how data collection and interpretation has evolved since 2011, and why sustainability is first and foremost a business imperative.

From Pioneering ESG Data Collection to Secondaries Market Leadership

Ardian began systematically collecting ESG data from its GPs in 2011, long before sustainability became mainstream in private markets. What started as a modest questionnaire of around 20 questions has now expanded to over 80 data points on topics ranging from ESG quantitative targets, carbon accounting methodologies, diversity and inclusion policies, to biodiversity risks in infrastructure projects.

In 2025, 213 GPs—representing 96% of Ardian’s secondaries and primaries portfolio— participated in the firm’s annual campaign, making Ardian’s ESG dataset one of the most comprehensive in the industry.

But the key, Tissier stresses, is not just collecting data—making use of them. Ardian provides individual ESG and Climate scorecards and benchmarks to every GP, highlighting strengths and opportunities for improvement. Underperformers are offered one-on-one feedback sessions with Ardian’s experts, covering areas such as climate, regulation, and data analysis., and a webinar highlighting best practices and market trends is organized for all GPs in the portfolio

Sustainability as a Business Imperative

For Tissier, the real shift over the past years has been moving from ESG as a compliance exercise to ESG as a value creation lever.

“Nearly all of our GPs now integrate ESG into due diligence,” she explains, “but only a minority are systematically analyzing decarbonization pathways or treating sustainability as a driver of growth. Those that do are clearly ahead of the curve.”

She is quick to emphasize that sustainability is not simply about values—it is about long-term business resilience. “As private investors with long holding periods, we need to ensure that assets won’t become stranded in 10–15 years’ time. Framing sustainability from a business perspective makes it indisputable.”

Regional Differences and Regulatory Drivers

Across global markets, the pace and focus of ESG integration vary significantly, shaped by local regulations, investor expectations, and market maturity. Europe remains at the forefront of ESG data collection and regulatory advancement, with both EU-wide initiatives such as the SFDR and country-specific frameworks driving progress. Within Europe, there is notable diversity: the Nordics and the Netherlands are particularly focused on aligning investments with the UN Sustainable Development Goals (SDGs), while the DACH region is recognized for its rigorous regulatory compliance and early adoption of new standards. In other regions, such as MENA and Asia, there is a growing emphasis on embedding sustainability into investment processes, often driven by increasing LP scrutiny, as well as the influence of global initiatives like the Net Zero Asset Owner Alliance (NZAOA).

Despite these regional differences, Ardian’s approach remains consistent: “We frame ESG not only as a risk mitigation lever but as a way to deliver on our fiduciary duty,” states Tissier. “It is a rapidly evolving landscape, but we have never changed our approach.”

What Best-in-Class Looks Like

When asked what defines best-in-class sustainability practice today, Tissier points to several elements:

1. Integrating sustainability as a systematic lever for value creation in due diligence and portfolio company business plans.

2. Quantifying the impact—measuring both the cost efficiency and value created by sustainability initiatives.

3. Capitalizing on data and market intelligence to better inform investment decisions, portfolio engagement and ultimately drive performance of the portfolio

“These practices ensure that sustainability is integrated in the core business strategy, not just as risk management,” she says.

Looking Ahead

As Ardian has a strong sustainability team (with 12 professionals across Paris and New York), to reflect on the diversity its investment activities. Tissier sees data, technology, and AI playing an even bigger role. The firm is already using AI to enhance qualitative ESG analysis and provide deeper insights to LPs, the investment teams and portfolio companies and GPs.

“Our goal is to ensure alignment across Ardian and to share actionable insights. Ultimately, it’s about raising the performance of the entire portfolio—and the industry as a whole.”

April Tissier will be speaking at the 0100 International in Milan, taking place October 27–29, where she will join the panel “How Has the Geo-economic Change Affected GPs’ ESG Practices?” alongside leading industry peers, including Noëlla de Bermingham, Chief Sustainability Officer at Andera Partners.

In private equity, investors are rethinking the structures they use to build exposure. For some, this still means traditional drawdown funds that deploy capital over time. But for a growing number, the focus is shifting toward evergreen vehicles, which offer immediate exposure, faster compounding, and new ways to manage allocation and liquidity.

Evergreen funds are becoming a larger part of the market as structures such as ELTIFs in Europe and LTAFs in the UK expand access for a broader pool of investors. These vehicles typically feature lower minimum commitments, continuous fundraising, and periodic redemptions to provide limited liquidity. The global market for indefinite-life funds is already around $2.7 trillion and is expected to reach $4.4 trillion by 2029, with wealth-focused evergreen funds driving much of this growth.

The model appeals because it allows investors to put their money to work immediately, rather than waiting years for a drawdown fund to deploy capital. Since evergreen vehicles are already largely invested, new investors gain exposure from day one, with a small allocation reserved in liquid assets to manage redemptions or capture new opportunities. Capital is automatically recycled when portfolio companies are sold, reducing the risk of being “out of the market” while waiting to reinvest proceeds. Over time, this continuous exposure can compound returns more effectively.

Evergreen funds can achieve similar multiples on invested capital (MOIC) as drawdown funds, but with a lower required internal rate of return (IRR), since capital is deployed earlier and at a higher average allocation.

This makes them especially attractive for individual investors, who may not have the resources to manage capital calls, reinvestments, and oversubscriptions typical of closed-end structures. They can also complement traditional funds, providing a steady allocation base, while drawdown vehicles add targeted exposure across vintages, strategies, or geographies.

Historically, evergreen funds were less common. LPs often preferred the predictability of fixed-term funds, while GPs liked the ability to measure and “lock in” performance metrics at exit. But momentum is shifting.

🔹 Evergreen funds are gaining traction today (2025):

· Venture capital: Sequoia Capital made headlines in 2021 by shifting its U.S. and European VC funds into a single evergreen vehicle, signaling big-name validation. Others like Founders Fund and Sequoia Heritage have adopted similar approaches.

· Private equity secondaries: Ideal for ongoing capital deployment and liquidity management.

· Sustainability and impact strategies: Where patient capital is critical to supporting long-term goals in areas like climate, energy transition, and infrastructure.

🔹 Why now?

· Institutional demand: Pension funds and sovereign wealth funds are increasingly drawn to evergreen funds for long-term exposure without the “J-curve.”

· Regulatory tailwinds: ELTIF 2.0 in Europe and similar reforms are making evergreen structures easier to implement for retail and institutional investors.

· Sector alignment: Capital-intensive, long-horizon areas such as infrastructure, climate tech, and healthcare are a natural fit for evergreen structures.

Deep Dive into Evergreen Funds at 0100 International

At 0100 International, a panel of experienced investors will tackle one of the most discussed topics in private markets: the rise of semi-liquid and evergreen funds.

With market volatility, tighter liquidity, and growing pressure on traditional fund structures, limited partners are rethinking how they access private equity. The session will explore how evergreen vehicles are gaining traction as an alternative model, one that can improve alignment between managers and investors, offer partial liquidity, and open up new channels for capital formation.

The panel brings together a strong mix of perspectives: Senia Rapisarda (HarbourVest), Luigi Croce (Schroders Capital), Shaha Miah (Pantheon), and Federico Pavoncelli (StepStone Group). Each works closely with LPs and private wealth clients on structuring funds, co-investments, and allocation strategies across Europe and beyond. Together, they’ll discuss what drives the adoption of evergreen funds, where the model works best, and what risks investors should consider as these structures evolve.

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🌍 Across the Ecosystem | News & Useful Resources for You

We’re not the only ones rethinking what “holding periods” really mean in private equity today. With market cycles shifting, fundraising timelines stretching, and an increasing number of managers turning to evergreen funds, the conversation around flexibility, liquidity, and long-term alignment between GPs and LPs is gaining momentum across Europe and beyond.

Here’s a spotlight on perspectives influencing this change in evergreen private equity.

🗞️ News | EQT launches ELTIF evergreen fund to expand retail access to private equity

EQT has launched the Nexus ELTIF Private Equity fund, expanding its evergreen platform to give more non-professional investors across the EU and EEA access to private markets.

Structured under the EU’s ELTIF 2.0 regime, the fund lowers entry barriers with reduced minimums and broader eligibility, offering individuals a way to invest alongside institutions in EQT’s established private capital strategies. The portfolio contains healthcare, technology, and services, with a presence across Europe, North America, and the Asia-Pacific region.

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🗞️ News | KKR recut terms with big backers to hand rich investors larger share of deals

KKR has restructured agreements with its institutional backers to allow wealthy individuals a larger share of its private equity deals, reflecting the rapid growth of money flowing into evergreen funds.

Historically, KKR’s closed-end funds limited affiliated vehicles to 7.5% of deal equity, but with its “K-Series” evergreen funds raising nearly $12bn, the firm sought carve-outs closer to 20%. These perpetual vehicles, which allow investors to commit and withdraw capital regularly, are designed to invest alongside KKR’s flagship buyout funds and have quickly become a major part of its fundraising strategy.

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📄 Article | Evergreen funds: What are the liquidity and fund structuring considerations?

Launching an evergreen vehicle involves more than adjusting an existing closed-end model, as managers must carefully address issues like liquidity provisions, transparency, and compliance.

While evergreen funds are expanding access to private equity, their long-term viability depends on strong structuring and regulatory alignment.

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Family offices are becoming increasingly active in private markets, yet many continue to struggle with strategy, manager selection, investment discipline, and portfolio construction. In this interview, Ivan Nikkhoo, Managing Partner at N3 Capital and Navigate Ventures, shares his perspective on how family offices should approach private assets, why direct investing often leads to poor outcomes, and where opportunities lie in today’s market.

What is the strategy behind N3 Capital and Navigate Ventures?

At N3 Capital, our family office arm, we invest in a diversified manner across multiple private capital strategies—private equity, real estate, private debt, secondaries, and funds of funds—primarily through expert managers and other families. Our philosophy is that success in private assets requires specialization, access to high-quality deal flow, and a clear competitive edge. That is why we prefer to back expert managers in each strategy rather than invest directly.

At Navigate Ventures, our operating business, we take a highly focused approach: direct venture investments in early growth-stage enterprise SaaS companies outside Silicon Valley. We have raised three funds to date, each under $100 million, with a targeted holding period of three to four years. The goal is an accelerated path to DPI with a disciplined, risk-mitigated strategy.

So your approach combines specialization with education for other families?

Exactly. I spend a great deal of time educating family offices at global conferences. Many families built their wealth in operating businesses, but that experience does not always translate into understanding private markets—how to evaluate investments, what questions to ask, or how to construct a portfolio.

Direct investments by family offices frequently underperform. The reality is that the best companies typically raise from institutional investors first. If a startup is turning to a family office for capital, it often means institutional investors have already passed. That’s why I advise families to work with specialist managers and negotiate no-fee/no-carry co-investment rights. This enables them to learn by participating, but with expert guidance and reduced risk.

How should family offices think about private assets?

They should begin with top-down asset allocation: dividing capital between real assets, public assets, and private assets. Within private assets, families then need to decide allocations across the six main strategies: private equity, venture capital, private debt, secondaries, funds of funds, and real estate.

The next step is to determine where to focus—early-stage vs. growth, geographies, sectors—and, most importantly, to select the right managers.

Two factors drive private capital returns: manager selection and vintage year. The underlying strategy is secondary to these two. That’s why careful GP selection and commitment pacing across vintages are critical.

What mistakes do family offices most often make?

The most common mistakes include:

1. Lack of expertise – relying on trusted acquaintances rather than professionals with deep private market experience.

2. Weak infrastructure – insufficient systems to monitor capital calls, distributions, and portfolio performance in real time. Without visibility, liquidity management and outcome evaluation become impossible.

3. Insufficient diligence – families often fail to ask the right questions to optimize their risk/return profile.

How are current market dislocations affecting family offices?

Two trends stand out:

1. Institutional dominance – Pension funds and insurers are allocating more to private capital, making it harder for family offices to access the largest managers, who prefer re-ups from big LPs.

2. Alpha from specialization – Historically, the strongest returns have come from specialized emerging managers in funds two, three, or four. Yet many family offices avoid them, perceiving higher risk.

For proactive families, the real opportunity lies in backing smaller, highly specialized funds under $1 billion. These managers are best positioned to generate alpha—but they are difficult to source and even harder to diligence.

Some argue the system is broken—that it favors large asset aggregators. Do you agree?

Not at all. The system isn’t broken—it’s simply difficult. Asset aggregators exist because they can raise billions and generate enormous fees. But smaller, specialized funds can still thrive.

For emerging managers, the challenge is differentiation. Like startups, if you cannot convince the right investors why they should back you, then perhaps you shouldn’t be in the business.

What differences do you see between U.S. and European family offices?

U.S. family offices tend to be more seasoned private capital investors. In Europe, there remains both significant under-allocation and enormous opportunity. Interestingly, European families are eager to invest in U.S. funds, while American families rarely allocate to European managers. That imbalance is unfortunate, as many European GPs deliver strong returns.

What advice would you give to European family offices looking to expand into private assets?

Start with clarity: define your strategy and risk appetite. From there, identify managers who combine integrity, specialization, and alignment. Invest through them, negotiate co-investment rights, and use the process as a learning opportunity. Above all, remain disciplined—particularly in manager selection and vintage-year diversification.