Welcome to this week’s edition of The Private Capital Compass, a curated weekly analysis from Private Capital Global designed to cut through the noise and surface what matters most and what it means for investors and operators.

This week’s developments point to an industry recalibrating around scale, leadership quality, and repeatable advantage. From record-setting healthcare private equity activity and a clearer separation between top- and bottom-quartile managers, to the rising bar for founders in capital-constrained biotech and the growing role of AI in diligence, the signals are increasingly consistent: performance is becoming more transparent, and differentiation more structural.

In this edition, we highlight the stories shaping private capital, examine a wealthtech platform investment that underscores the appeal of embedded infrastructure models, and explore how operational excellence is evolving from a tactical initiative into a durable competitive moat.

Compass Points

Key insights at a glance:

• Healthcare Private Equity Hits Record 2025: Scale, Exits, and Regional Shifts: According to Bain & Co.’s Global Healthcare Private Equity Report, 2025 was a banner year for healthcare private equity, with estimated deal value surpassing $190 billion and deal volume reaching its second-best total ever. Large-cap transactions exceeding $1 billion drove this surge, while sponsor-to-sponsor exits rebounded sharply, reflecting both fund lifecycle dynamics and abundant dry powder. Europe led with a biopharma- and provider-driven surge, North America saw strong recovery despite midyear macroeconomic headwinds, and Asia-Pacific recorded broad-based growth across biopharma, medtech, and healthcare IT. Bain emphasizes that these trends highlight a deeper structural evolution: healthcare PE sponsors are increasingly executing at scale, leveraging portfolio-wide operational capabilities, and pursuing exits strategically to meet LP expectations for consistent, double-digit returns.

• Private Equity’s Edge Is Becoming More Transparent and Persistent: Boston Consulting Group’s recent analysis highlights how private equity value is created and measured. Investors can decompose returns into growth, margin expansion, leverage, and multiple change, separating true operating skill from market-driven performance. This has made manager selection more precise: top-quartile funds now repeat their performance approximately 45% of the time and remain in the top half around 80% of the time, creating a clear performance differential of roughly 13 points in annual IRR versus bottom-quartile peers. Private equity’s enduring advantage lies in combining capital, operational expertise, and repeatable processes.

• Women’s Health Is Emerging as a Trillion-Dollar Private Capital Opportunity: In a recent article, Kearney argues that women’s health represents one of the most undercapitalized opportunities in global healthcare, despite women accounting for half the population and the majority of healthcare decision-making. The firm highlights a stark mismatch between disease burden and capital allocation: while private investors deployed approximately $34 billion into women’s health between 2020 and 2025, funding remains heavily concentrated in fertility and oncology, leaving conditions such as cardiovascular disease, autoimmune disorders, neurological health, menopause, and gynecological conditions chronically underfunded. Kearney frames this imbalance not only as a moral gap but as a structural inefficiency, estimating that closing the women’s health gap could unlock up to $1 trillion in incremental global economic output annually by 2040, with each dollar invested generating roughly three dollars in economic growth. The analysis positions private capital as a critical catalyst for change, particularly in diagnostics, devices, and digital health, but emphasizes that meaningful progress will require investors to broaden their definition of women’s health, realign capital with true disease burden, and close persistent growth-stage funding gaps.

• Capital Concentration Raises the Bar on Founder Quality in Early Biotech: BioSpace published insights from conversations at the 2026 J.P. Morgan Healthcare Conference that reinforced the reality for early-stage biotech companies: as capital continues to concentrate, venture investors are placing increased emphasis on founder pedigree, CEO fit, and leadership adaptability as core underwriting variables. With funding pressures intensifying throughout 2025 and follow-on capital becoming more difficult to secure, VCs described an environment where fewer firms are deploying meaningful capital into a narrower set of opportunities, heightening competition for each investment dollar. While founders with prior exits remain highly attractive, investors stressed there is no single “founder phenotype”; first-time founders can succeed if they exhibit execution discipline and a willingness to build and evolve the right leadership team. Leadership ego, or the absence of it, emerged as a critical differentiator, with the most resilient companies led by founders and boards prepared to make difficult changes as strategic needs shift.

• AI Meets Due Diligence: Keye Launches Deterministic Co-Pilot for PE: Keye’s launch of Odin, the first fully deterministic AI co-pilot for private equity, signals a shift in how deal teams approach diligence. Designed to translate natural-language questions into audit-ready analyses instantly, Odin eliminates the traditional trade-off between speed and rigor. By bridging financial statements, transaction logs, and external datasets, it allows teams to move from simple queries to complex, portfolio-level benchmarking in seconds. Unlike standard AI tools, Odin leverages deterministic logic to ensure repeatable, auditable outputs, while embedding the heuristics and judgment of experienced investors. For private equity firms facing compressed timelines, intensified competition, and a growing deal pipeline, Odin represents a step toward the “Autonomous Deal Team,” enabling faster, more precise, and data-driven investment decisions across the lifecycle.

Deal Spotlight: Aquilance Raises $16M from Ten Coves Capital

Transaction: Aquilance, a provider of personal financial management services for ultra-high-net-worth families and family offices, has raised a $16 million growth investment from Ten Coves Capital, a fintech-focused private equity firm known for its early backing of Bill.com. The transaction marks Aquilance’s first institutional capital raise in its 39-year history and represents a significant inflection point for the firm as it accelerates platform development and expands its go-to-market strategy.

Founded in 1987 as My Accountant, Aquilance has evolved from an outsourced bill pay and accounting service into a modern wealthtech platform supporting complex financial administration across bookkeeping, bill pay, investment accounting, and entity-level reporting. Since rebranding in 2021, the company has strengthened its leadership team with executives from Envestnet and Morningstar, including CEO John Carey, CRO Kevin Reed, and CTO Craig Setera.

Why It Matters: This investment highlights several important themes shaping private capital deployment across wealthtech, fintech, and advisor enablement platforms.

First, sustained private equity interest in infrastructure providers that sit behind the advisor-client relationship rather than directly competing with advisors. Aquilance positions itself as an operational extension of advisory firms, handling the increasingly complex financial administration demands of high- and ultra-high-net-worth clients so advisors can remain focused on advice, growth, and client relationships. This “picks-and-shovels” positioning continues to resonate with investors seeking durable, recurring revenue models embedded deeply into advisor workflows.

Aquilance’s nearly 40-year operating history, combined with its first institutional raise, mirrors a familiar private equity playbook: modernize technology, professionalize go-to-market functions, and scale distribution without disrupting trusted client relationships. Ten Coves’ fintech pedigree further suggests confidence in Aquilance’s ability to productize complex financial administration in a way that feels intuitive and bank-like to end clients. The deal signals continued convergence between wealth management and fintech infrastructure. By verticalizing a Bill.com-style money movement and reporting experience specifically for advisors serving wealthy families, Aquilance is addressing a persistent gap in the market. 

Finally, the focus on RIA home office adoption is notable. Rather than relying solely on advisor-by-advisor referrals, Aquilance is positioning itself to become part of the standardized service stack at large advisory firms. For private equity investors, this shift introduces the potential for accelerated growth, improved customer acquisition efficiency, and greater enterprise-level contract value.

Deep Dive: The Competitive Moat of Systematic Value Creation

Entry valuations remain elevated as hold periods stretch beyond historical norms, financing costs reset higher, and exit windows continue to narrow. What began as a trend among the largest platforms has accelerated into an industry-wide movement: the establishment of dedicated Value Creation Offices and Centers of Excellence designed to deliver systematic operational improvement across portfolios. 

These permanent organizational units signal a strategic pivot toward operational alpha as a significant driver of returns. The Centers of Excellence help to codify repeatable playbooks across functional areas, partnering with CFOs to drive financial infrastructure and cash conversion, working alongside COOs to accelerate operational transformation, and collaborating with CIOs and CTOs to deploy technology and AI-enabled solutions at scale. 

Institutionalizing Operational Capabilities

As KPMG observes in its recent Value Creation in Private Equity report, "the next decade belongs to houses that can manufacture operational alpha: systematic EBITDA uplift, delivered quickly and at scale." Operational alpha, properly defined, represents the incremental enterprise value generated through disciplined execution across core business functions, independent of leverage or macro tailwinds. It manifests as margin expansion, accelerated organic revenue growth, working capital optimization, and strengthened balance sheets. What separates outperformers from the pack is the ability to make these outcomes predictable and repeatable, not opportunistic.

Finance as Strategic Enabler

This predictability requires specialization and structure. Finance has evolved well beyond its traditional compliance and reporting mandate. CFOs and fund-level finance advisors now function as strategic enablers, building the analytical infrastructure that supports faster, better-informed decision-making. Standardized KPI frameworks, integrated financial planning systems, and real-time performance visibility enable boards and management teams to identify variance early, allocate capital with precision, and link operational initiatives directly to financial outcomes. Firms that elevate finance from scorekeeper to value creator consistently outperform on cash conversion and exit readiness.

Operational Execution at Scale

Operations remains the foundation of most value creation plans, but execution velocity and accountability have intensified. Process optimization, supply chain resilience, and post-merger integration are no longer multi-year efforts; they are expected to deliver tangible impact within the first twelve to eighteen months of ownership. Execution discipline separates teams that generate results from those that generate activity. At the fund level, value creation teams apply pattern recognition across portfolios, ensuring companies benefit from proven playbooks rather than rediscovering solutions in isolation.

Technology and AI as Competitive Differentiators

Technology has emerged as a critical accelerant of operational alpha. What was historically viewed as a cost center is now a competitive differentiator. Cloud infrastructure, integrated data platforms, and modern enterprise systems provide the foundation, but the highest-impact gains are increasingly driven by AI-enabled applications. Pricing optimization engines, demand forecasting models, sales prioritization algorithms, and automated customer support workflows are delivering measurable, near-term EBITDA lift. The challenge for CIOs, CTOs, and CISOs is executing at scale while managing data integrity, cybersecurity risk, and alignment between technology roadmaps and business strategy.

Commercial Excellence & The Human Capital Foundation

Commercial excellence has similarly moved to the center of the value creation agenda. Revenue growth today is driven less by market tailwinds and more by disciplined go-to-market execution. Sales force effectiveness, value-based pricing strategies, CRM-driven pipeline management, and data-informed customer segmentation are reshaping competitive positioning. 

None of this is sustainable without the right talent. Human capital underpins every transformation effort, and leading funds are investing accordingly. Rigorous management assessment at acquisition, proactive succession planning, incentive alignment, and deliberate cultural integration are now standard components of institutional-grade value creation strategies. Strong leadership teams accelerate execution, attract high-performing talent, and sustain performance well beyond a single ownership cycle.

A Center of Operational Excellence is defined by clarity of mandates, consistency of execution, and the ability to translate strategy into measurable outcomes across the portfolio. The models that work best serve as connective tissue among deal teams, operating partners, and portfolio leadership, bringing standardized playbooks, functional specialization, and accountability to every phase of the investment lifecycle.

As you look ahead, it is worth assessing where your firm stands. Are operational capabilities engaged early in diligence, or only after issues emerge? Are best practices codified and reusable, or recreated deal by deal? Do portfolio leaders have access to consistent tools, data, and expertise, or does performance depend on who happens to be involved? Are you leveraging fund-level resources as strategic enablers, or viewing them as external oversight? Is operational support accelerating decision-making, improving visibility, and reinforcing execution?

Closing Remarks

Thank you for reading this week’s edition of The Private Capital Compass. Across 2026, PCG will convene investors, operators, and advisors through a growing slate of curated events in Austin, Boston, Chicago, London, New York, and San Francisco, each designed to move beyond surface-level discussion and toward practical insight, peer exchange, and real-world application.

Our mission remains consistent: to deliver clear-eyed analysis, relevant intelligence, and informed perspective that helps private capital professionals translate market signals into durable value across deals, portfolios, and platforms.

We appreciate your continued engagement and look forward to navigating the year ahead together.

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