After several uneven years, momentum appears to be returning to global private equity.

Bain & Company estimates that global buyout deal value rose strongly in 2025, alongside a significant recovery in exits, as large-scale transactions returned and market conditions improved.

The recovery remains uneven, but the direction of travel is important.

Recent activity provides further evidence of a market becoming more active -

• KKR and Energy Capital Partners are considering increasing their previously rejected £4.95 billion proposal for Ireland's DCC
• Bain Capital has closed a US$10.5 billion Asia fund - its largest ever focused on the region
• Competition continues for strategically important technology, data and infrastructure assets across major global markets

What stands out, however, is not simply deal volume.

It is the increasing emphasis on operational depth, execution capability and customer relevance as drivers of enterprise value.

📈 Growth needs to be created, not assumed

The investment environment that supported private equity for much of the previous decade has changed.

Cheap debt, consistently expanding valuation multiples and abundant liquidity made several traditional sources of return particularly powerful.

Those conditions cannot simply be assumed going forward.

For many investments, stronger returns will increasingly need to come from improving the underlying business.

That shifts attention towards a different set of questions -

• Where does the business already have genuine momentum?
• Which customers, products and markets have the strongest future economics?
• Where can management accelerate organic growth?
• Which capabilities can create sustainable competitive advantage?
• What needs to change operationally to translate the investment thesis into performance?

The quality of the value-creation plan therefore becomes increasingly important and so does the ability to begin executing it early.

💰 Capital is plentiful. Conviction remains scarce.

Private equity continues to have significant capital available for investment.

But having capital and finding opportunities where that capital can generate attractive returns are different things.

Greater competition for high-quality assets increases the importance of investment conviction.

That means going deeper before the deal -

• Understanding the underlying sources of customer and revenue growth
• Testing whether competitive advantage is genuinely sustainable
• Assessing management capability and organisational readiness
• Identifying specific operational value-creation opportunities
• Being explicit about what needs to be true for the investment thesis to work

The strongest investment theses should do more than explain why an asset is attractive.

They should provide a clear view of how its value can be materially increased under ownership.

⚙️ Operational capability is becoming a more decisive differentiator

The shift towards operational value creation has important implications after acquisition as well.

Financial discipline remains essential. So do capital structure, portfolio decisions and strategic M&A.

But sustainable value creation increasingly depends on the ability to improve the operating performance of the business itself.

That can include -

• Accelerating organic growth
• Improving pricing and commercial discipline
• Increasing customer retention and lifetime value
• Simplifying operating models and reducing unnecessary complexity
• Using AI and technology to improve productivity and customer service
• Aligning leadership incentives and accountability with the investment thesis

None of these levers is particularly valuable as an isolated initiative.

The opportunity comes from identifying the few interventions capable of materially changing the economics of the business and concentrating resources behind them.

🤝 Customer relevance belongs in the value-creation plan

Customer trust and customer economics are also becoming more important to the investment case.

For businesses with established customer franchises, value creation is not simply a question of acquiring more customers.

It is also about understanding -

• Which existing customers have the greatest future economic value?
• Where retention can materially protect or increase earnings?
• Which customer relationships have the potential to deepen?
• Where better service, propositions or technology can strengthen competitive advantage?
• How customer trust influences pricing, loyalty and long-term growth?

These questions connect customer strategy directly to enterprise value.

For investors, that makes customer insight relevant not only after acquisition, but potentially during diligence and investment-thesis development itself.

🔎 From investment thesis to execution

As deal activity increases, speed will matter.

Sponsors need to deploy capital. Investors want distributions. High-quality assets will continue to attract competition.

But greater activity should not mean lower discipline.

If anything, a more competitive market increases the premium on strategic clarity before acquisition and execution capability afterwards.

The strongest sponsors will increasingly connect the two.

The investment thesis defines where value should come from.

The value-creation plan translates that thesis into a small number of operational priorities.

Management accountability ensures those priorities become outcomes.

And capital is continuously reallocated towards the opportunities generating the strongest returns.

🌐 The value-creation model is evolving

Private equity has long demonstrated an ability to create value through active ownership.

The next phase may depend less on financial engineering or expansion for its own sake and more on disciplined focus, operational execution and the ability to compound customer value over time.

At Rival Street, these are themes we continue to see across conversations with Boards, CEOs and private equity sponsors globally -

• Follow the areas where genuine momentum exists
• Allocate capital selectively and with conviction
• Go deeper operationally to improve the underlying business
• Understand customer trust and customer economics as sources of enterprise value
• Translate the investment thesis into execution from the outset

Because as private equity activity accelerates, the differentiator will not simply be the ability to do deals. It will be the ability to create more value from them.

Clarity. Focus. Growth.
For the decisions that shape value.

🌐 rivalstreet.com

This Perspective is provided for general information only and does not constitute financial, investment, legal or other professional advice. Please refer to our Terms of Use.