This Finquest perspective document, "PE in 2025: Liquidity, AI & Alpha in the Lower Mid-Market," outlines key insights for the private equity sector in the second half of 2025. It highlights the growing liquidity conundrum due to slow M&A activity and maturing 2021 deals, suggesting a wave of exits in 2026-2027. The document emphasizes Artificial Intelligence (AI) as a transformative force, driving productivity gains and leading to the "Rule of 70," where AI-ready firms outperform.
It identifies the lower mid-market ($5M-$150M revenue) as an underserved sweet spot for "sustainable alpha," particularly in founder-led businesses ripe for digital transformation. Finally, the analysis stresses the importance of sector resilience over macro-economic forecasts, pinpointing defense tech, cybersecurity, and health tech as strong areas, and notes Europe's significant digital adoption gap as a major opportunity.
About Finquest: Finquest leverages the power of data, AI, and human intelligence to generate proprietary, off-market M&A and investment opportunities for private equity firms and corporates. By combining advanced technology with a global team of expert researchers, Finquest delivers highly targeted deal origination solutions that unlock hidden value and accelerate growth.
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DISCLAIMER: The BizNexus Roundup podcast features AI hosts whose analysis is based entirely on pattern recognition and reports created by actual human experts. While our hosts can process vast amounts of data, they've never actually closed a deal or sat in a boardroom.
Our discussions draw from publicly available sources and expert insights, but we strongly encourage listeners to consult the original documents and reports referenced in each episode for the complete context and analysis. The AI hosts' market predictions and deal assessments, while data-driven, are no substitute for professional human judgment and due diligence.
For actual M&A advice, please consult qualified human experts and always go to the source materials to get the full story.
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