Welcome to this week's edition of The Private Capital Compass, brought to you by Private Capital Global (PCG), a Sparc Group company. We've been heads-down managing our fall conference schedule, but PCG is back with the latest market insights, deal activity, and value-creation strategies shaping private capital.

In this edition, we explore a private equity landscape defined by paradox: fundraising declined 23% in H1 2025 amid a fourth consecutive year of limited distributions, yet deal values surged 30% as AI-driven megadeals and mega-transactions reshape the market. We examine how liquidity constraints are accelerating the secondaries boom while mega family offices consolidate unprecedented power in private markets. From the NFL exploring expanded private equity ownership to the Big Ten's controversial $2 billion deal proposal, we track PE's growing footprint across professional and collegiate sports. We also reflect on the value creation strategy discussions from our summit in New York, where industry leaders converged on a new operational playbook centered on value creation, finance resilience, AI deployment, human capital optimization, and integrated execution.

We also spotlight Electronic Arts' historic $55 billion take-private transaction, led by Silver Lake, Saudi Arabia's Public Investment Fund, and Affinity Partners—the largest all-cash sponsor-led deal in history and a watershed moment signaling the convergence of gaming with technology, sports, and sovereign capital strategies.

Compass Points

Key insights at a glance:

• PE fundraising declines 23% as liquidity crisis reshapes investor strategies and regional preferences: According to The With Intelligence PE Fundraising Report, the industry raised 23% less capital year-over-year in H1 2025 as allocators experienced a fourth consecutive year of limited distributions, severely constraining their ability to deploy fresh commitments and forcing many to rethink pacing strategies. Buyout funds remained dominant despite the downturn, raising $192 billion in H1 and more than $1 trillion over the past 30 months across buyout and growth strategies, while secondaries emerged as a critical liquidity solution with $55 billion raised—their second-strongest half since H2 2020—accounting for 18.5% of total fundraising as investors turned to alternative exit mechanisms. Regional capital flows are shifting dramatically as multi-region funds have captured 44% of capital among the largest raises and have become increasingly appealing due to their ability to deploy assets opportunistically, with a focus on relative value. In contrast, North America-focused funds experienced a notable drop-off driven by policy uncertainty around the U.S. tariff regime, potential slower growth, and the relative attractiveness of non-U.S. asset prices.

• AI-driven dealmaking propels 2025 toward second-strongest year in history for large transactions: According to PwC analysis of S&P Global Market Intelligence data, overall deal volume is up 3% to approximately 7,700 transactions through early September, but total value has surged 26% to $1.1 trillion driven by a record pace of large deals ($1B-$5B) and megadeals (over $5B) that would exceed 2024 levels by 17% and 31% respectively if sustained. AI has emerged as the single most important catalyst, with roughly one quarter of megadeals carrying AI themes spanning data center products, power infrastructure, and capability integration, while Big Tech pursues additional "acquihires" for talent and IP through minority stakes to avoid antitrust scrutiny. Private equity is bolstering megadeal activity despite declining overall exits, as firms sell primarily to corporate buyers seeking recurring-revenue, data-rich assets, including cybersecurity, enterprise software platforms, and scaled businesses like insurance brokerages and payment providers, with several transactions unwinding large pre-2020 club deals, reflecting sustained dealmaker confidence in transformative transactions despite trade policy volatility.

• Mega family offices consolidate power in private markets as wealth inequality creates two-tiered investment landscape: According to Deloitte, the world's single-family offices are experiencing explosive growth with assets under management projected to reach $5.4 trillion by 2030, up from the current $4.7 trillion tracked by With Intelligence across just over 3,000 offices, representing approximately 8% of global pension assets, though the true scale is likely understated as nearly two-thirds were founded after 2000. A stark divide is emerging within this universe, with offices managing over $1 billion resembling mid-sized asset managers with nearly 30 staff, formal boards in 70% of cases, and $900,000 CIO pay packages according to Morgan Stanley Private Wealth Management and Botoff Consulting, while thousands of smaller outfits operate with fewer than ten people under patchy governance. The most prominent family offices wield sovereign wealth fund-level firepower to directly source deals and command advantageous terms in private markets, where alternative investments comprise 42% of average portfolios per BlackRock, half in private equity. At the same time, smaller peers must rely on co-investments, broader funds, and digital syndicates at higher fees despite 60% of U.S. family office investments taking the form of club deals, according to PwC. This concentration of power is accelerating as higher rates favor large offices that can lend directly or back platforms capturing full 10%+ yields on senior loans versus smaller peers confined to funds earning around 8% after fees, while the record $151 billion secondaries market allows bigger players to acquire distressed stakes at discounts as smaller offices cash out of illiquid holdings amid sluggish PE exit activity, all operating under a light-touch regulatory regime that makes their operations relatively opaque despite their growing sway over private markets.

• PE market demonstrates mixed performance with structural shifts toward larger transactions: According to Ropes & Gray analysis, U.S. private equity deal count has declined 5% year-to-date compared to 2024, yet deal value has surged 30% as the market experiences a pronounced shift toward mega-deals, with nearly 40% of disclosed transactions now exceeding $1B–a steady multi-year trend that continued through August despite two consecutive months of declining deal counts. The industry continues to grapple with significant liquidity constraints characterized by low distributions to LPs and extended holding periods that have created a substantial backlog of portfolio companies awaiting exit, though some relief is emerging through multiple channels: the secondaries market is experiencing unprecedented growth after eclipsing $100B in aggregate transaction value through H1 2025 with expectations for continued expansion in the second half driven by persistent demand for liquidity solutions, while the PE-backed IPO market gained momentum following a strong summer and entered fall with a solid pipeline, although activity levels remain below pre-pandemic benchmarks. Despite current headwinds, dealmakers maintain an optimistic outlook, believing market conditions are improving and that potential transaction activity will accelerate significantly over the coming months as exit markets continue to strengthen and work through their existing backlog.

• PE rapidly expands across sports landscape as leagues balance liquidity demands with governance concerns: The NFL, which became the last major North American league to permit private equity investment in 2024, has successfully facilitated multiple minority stake transactions including Arctos Partners' acquisitions in the Buffalo Bills and Los Angeles Chargers, Ares Management's Miami Dolphins stake, and Sixth Street's reported three percent purchase of the New England Patriots at a $9B+ valuation, with Commissioner Roger Goodell now suggesting the league's current ten percent ownership cap could be lifted as firms provide liquidity and new business perspectives. Meanwhile, the Big Ten is pursuing a $2 billion private equity deal that requires a grant of rights extension through 2046, although it is facing significant opposition from Michigan and Ohio State over concerns about public universities entangling with private capital and further consolidating competitive advantages among elite programs. These parallel developments signal private equity's inevitable penetration across professional and collegiate sports as organizations seek new revenue streams for rising costs from media rights competitions, revenue-sharing obligations, and professionalization pressures, with observers predicting other conferences will pursue similar partnerships if the Big Ten closes its transaction, marking a fundamental transformation in how sports properties are capitalized and governed despite ongoing debates about preserving competitive balance and institutional control.

Deep Dive: A New Playbook for Private Capital Value Creation

At our New York summit, Transforming Operations for Speed & Scale, a stark reality emerged. With hold periods averaging 6.7 years, operational excellence has eclipsed multiple expansions as the primary driver of returns. Industry leaders, including Jay Epstein (Warburg Pincus), Alan Rozet (CD&R), Katherine Krone (Macquarie), Elan Pratzer (System-3), Frank Scarpelli (Sparc Partners), and Tracey Abbott (Leadership Current) converged on a critical insight—compressed exit windows demand precision execution across four operational domains.

Finance: The Foundation of Resilience

With financing costs at SOFR + 350-450 bps and exit values rising 34% YoY to $468 billion despite subdued distributions, finance operations are non-negotiable; the path forward centers on optimizing working capital and enhancing free cash flow. Dynamic supply-chain financing can unlock 10-15% EBITDA add-backs within 12-18 months, while AI-driven forecasting targets a 20% reduction in the cash conversion cycle.

Operators should implement real-time dashboards monitoring net debt/EBITDA ratios, maintaining sub-4x levels for exit readiness. A "FCF Accelerator Program" that blends zero-based budgeting and vendor renegotiations can deliver a 5-10% annual uplift—critical, as investment-to-exit gaps hit decade highs at 3.14x. Stress-testing for 200 bps rate hikes ensures covenant headroom against macro volatility.

Technology and AI: The Scale Enabler

59% of PE firms now view AI as their top value driver, surpassing traditional levers. AI-powered dynamic pricing models boost revenues by 10-15%, while predictive maintenance reduces operational costs by 20-30%. Yet scaling remains challenging under resource constraints.

The best approach? Deploy high-ROI pilots first. One venture-backed SaaS firm enhanced forecast accuracy by 25% through the use of AI analytics, accelerating its 2025 exit. Target API interoperability metrics ensuring 90% uptime in digital transformations. FTI Consulting data shows 87% of firms expect AI to drive revenue more than cost savings, with early adopters realizing value twice as fast as laggards.

Human Capital: The Growth Multiplier

Strong leadership correlates with 20-30% higher exit multiples through adaptive decision-making and cultural alignment. PitchBook reveals leadership gaps stall 55% of exits, making talent optimization urgent. Pre- and post-acquisition 360-degree reviews, coupled with incentive structures tied to EBITDA milestones, create alignment.

One healthcare investment rotated interim C-suite talent, driving 18% TSR uplift by aligning teams to margin expansion targets. Deploy annual talent heatmaps to identify gaps, and implement psychometric assessments to score executives on adaptability and strategic fit. Quantify the leadership role in AI adoption or financial resilience to capture 25% productivity gains.

Integrating Complementary Levers

Commercial strategy, pricing optimization, and procurement complete the playbook. AI-enhanced pricing yields margin gains of 5-8%, while procurement consolidation drives savings of 10-20%. The key is integration; one hedge fund portfolio optimized pricing and procurement simultaneously, expanding margins 12% amid hold extensions.

Your 30-Day Action Plan

Audit your playbook today using a 1-10 maturity scale across all four domains. Deploy one quick win within 30 days, whether an FCF diagnostic, an AI pilot, or a leadership workshop. Build momentum through early successes while establishing rigorous KPIs tied to your exit thesis. Track monthly, recalibrate quarterly, and maintain focus on metrics that matter to acquirers.

The firms commanding premium exits in 2025 won't be those making siloed improvements; they'll be those orchestrating finance resilience, technology scale, human capital development, and strategic execution in concert, creating compounding value that transcends any single initiative.

Deal Spotlight: Electronic Arts Goes Private in $55B Takeover led by Silver Lake, Saudi Arabia’s Public Investment Fund and Affinity Partners

Transaction: Electronic Arts, the gaming giant behind franchises like FIFA (EA SPORTS FC), Madden NFL, The Sims, and Apex Legends, is being taken private in a historic $55 billion all-cash deal. The consortium—comprising Saudi Arabia's Public Investment Fund (PIF), Silver Lake, and Affinity Partners—will pay $210 per share, representing a 25% premium to EA's September 25th closing price. This marks the largest all-cash sponsor-led take-private transaction in history. The financing structure includes approximately $36 billion in equity (with PIF rolling over its existing 9.9% stake) and $20 billion in debt committed by JPMorgan Chase. EA generated $7.5 billion in revenue in fiscal 2025 and will continue to operate from its Redwood City headquarters under the leadership of CEO Andrew Wilson. The transaction, approved by EA's board, is expected to close in Q1 FY27 pending regulatory approvals and shareholder vote.

Why It Matters:  This transaction signals a transformative moment for both the gaming industry and private equity markets. At $55 billion, it eclipses previous take-private records and demonstrates unprecedented confidence in gaming's long-term growth trajectory as entertainment converges with technology, sports, and digital experiences.

The consortium composition is particularly noteworthy. PIF's involvement extends Saudi Arabia's aggressive gaming sector strategy, following investments in companies like Embracer Group and Nintendo, as the kingdom seeks to diversify beyond oil. Silver Lake brings proven expertise in scaling technology platforms, while Affinity Partners, founded by Jared Kushner with backing from the Middle East, adds geopolitical dimensions to the deal structure.

For EA, going private removes quarterly earnings pressures, enabling longer-term innovation cycles critical in an industry increasingly defined by live-service games, AI integration, and metaverse experiences. The gaming sector faces headwinds from mobile disruption, subscription model transitions, and massive development costs, challenges that are better navigated outside public scrutiny. EA's sports franchises, which require continuous investment and licensing negotiations, could benefit from the flexibility of private ownership.

With EA off the market, competitors like Take-Two, Ubisoft, and potentially even smaller platform holders could become targets. The success of Microsoft's $69 billion acquisition of Activision Blizzard demonstrated regulatory pathways for mega-deals despite antitrust scrutiny, although the involvement of a sovereign wealth fund introduces new complexities regarding foreign investment review.

With hold periods stretching to 6.7 years and traditional multiple expansion no longer sufficient, our New York summit crystallized five immediate priorities for operating partners and portfolio leaders:

• Launch an FCF Diagnostic This Quarter - Partner with CFOs to baseline cash conversion cycles and identify 20% improvement opportunities through AI-driven forecasting and vendor renegotiations. Target sub-4x net debt/EBITDA ratios for exit readiness.

• Deploy Your First AI Pilot Within 60 Days - Select one high-ROI use case, such as dynamic pricing or predictive analytics. Early adopters realize value twice as fast—don't let legacy systems create competitive disadvantage.

• Conduct Leadership Assessments Now - Utilize 360-degree reviews and psychometric tools to evaluate executives on their adaptability. Leadership gaps stall 55% of exits—proactive bench-building is non-negotiable.

• Integrate Your Playbook Levers - Link procurement savings to FCF targets, align pricing optimization with commercial strategy. One integrated approach beats multiple siloed initiatives.

• Establish Monthly KPI Tracking - Build dashboards monitoring the metrics your acquirer cares about. Recalibrate quarterly and maintain relentless focus on exit-thesis alignment.

Opening & Closing Remarks from Erik Boender, Vice President & COO, Private Capital Global (a Sparc Group company)

Thank you for reading this week’s edition of The Private Capital Compass. At PCG, we believe the conversations around value creation, AI, human capital, technology, and financial alignment are central to this new playbook. That’s why we’re bringing together leading voices in the industry for invitation-only events in Austin, Boston, Chicago, Miami, New York, and San Francisco. Join us as we explore how operators are redefining value creation and subscribe to The Private Capital Insiders podcast hosted by Frank Scarpelli, founder of Sparc Partners and Private Capital Global, to hear from industry experts.

We look forward to continuing the conversation and sharing insights that help you drive measurable impact across your investments.