Welcome to this week's edition of The Private Capital Compass, brought to you by Private Capital Global (PCG), a Sparc Group company. At PCG, we remain committed to helping you navigate volatility and focus on what drives long-term value. Our goal is to equip you with strategic intelligence that empowers confident leadership in a complex environment.

This week, we spotlight five essential developments reshaping the private capital landscape, from deal momentum to talent shifts, selected to keep you informed. Whether you're scanning for signals or refining strategy, these stories are curated to support sharper, faster decision-making.

In this edition, we examine GP-led secondaries as the new liquidity solution, private credit's maturation signals, Wall Street's utilities play for AI infrastructure, and policy shifts opening 401(k)s to private equity. Our Deep Dive analyzes mid-year US market data, highlighting quality-over-quantity deal trends, while our Spotlight features Stone Point's acquisition of the healthcare platform The Difference Card. Additionally, three strategic recommendations are provided for navigating H2 2025.

Compass Points

Key insights at a glance:

• Secondaries Gain Momentum as Liquidity Tool: With traditional exits still facing headwinds, private equity firms are increasingly turning to GP-led secondary transactions to provide liquidity to LPs. These structures enable GPs to retain ownership of strong-performing assets while providing investors with optionality, underscoring a shift in how firms manage holding periods and distributions.
  

• Private Credit Growth Shows Signs of Maturity: After several years of rapid expansion, private credit markets may be approaching an inflection point. Concerns around underwriting quality, leverage, and fund complexity are prompting some investors to reassess future commitments. As the asset class matures, disciplined structuring and risk management are expected to take center stage.
  

• Utilities Emerge as a Strategic AI Infrastructure Play: The growing energy demands of data centers and AI infrastructure are drawing private capital into regulated utilities. These assets offer predictable cash flows and direct exposure to the digital economy’s physical backbone, making them increasingly attractive for long-horizon investors seeking energy-linked yield and growth.
  

• Deal Activity Concentrates in High-Conviction Themes: Despite lower deal volume, private equity deal value remains resilient as firms focus on fewer, larger, and more strategic investments. Key areas of activity include energy transition, infrastructure, and recurring-revenue tech platforms.
  

• Retirement Capital Poised to Flow into Private Equity: New policy momentum is building around expanding access to private equity through defined contribution plans, such as 401(k)s. As regulatory frameworks evolve, retirement-focused capital could become a significant new source of inflows for the asset class, reshaping fundraising strategies and long-term fund design.

Market Pulse

Equities

• S&P 500 (SPY): 624.05 (+0.04% past week)

• Dow Jones (DIA): 443.36 (-1.01% past week)

Commodities

• Brent Crude: 70.33/barrel

• USO ETF: 77.03 (+1.61%)

Deep Dive: US PE Market Update

The US private equity market is consolidating around high-conviction bets while showing early signs of recovery. Based on Ropes & Gray's mid-year private equity update, here's what the data reveals:

Deal Activity: Quality Over Quantity

• Volume down, value up: Deal count declined modestly in H1 2025, but deal value surged 38% from H2 2024

• Mega-deal concentration: $1B+ deals now represent 37% of disclosed values (nearly double 2020 levels)

• Strategic focus: Sponsors are prioritizing fewer, higher-conviction opportunities, with energy claiming four of the ten largest deals

Exits Finding Their Footing

Strategic buyers are back. Trade sales more than doubled compared to both halves of 2024 as corporate acquirers re-enter with focused M&A agendas, particularly in healthcare, industrials, and energy. Exit volume fell 14%, but values rose dramatically.

Valuations Rebound Despite Headwinds

LBO activity declined by 16%, yet EV/EBITDA multiples rose 0.8x to return to 2022 levels. Sponsors are paying premiums for differentiated assets with resilient margins and clear pricing power.

Capital Flows & Fundraising Shifts

• Real assets rising: Infrastructure and real estate now capture 26% of fundraising (up from recent years)

• Growth equity momentum: 24% of PE capital raised, with four of the top ten funds growth-focused

• Private wealth acceleration: Evergreen vehicles exceed $400B AUM, targeting $1T+ by 2029

Sector Spotlight

Consumer and energy deal values jumped by 230% and 191%, respectively, in H1 2025. Sponsors are gravitating toward segments with scale advantages and structural tailwinds.

Cross-Border Activity

The US sponsors deployed $13.7 billion internationally (up 24%), with 75% of the funding flowing to Europe. Inbound investment dropped 38% to $3.5 billion, reflecting global caution toward U.S. markets.

Looking Ahead

The Fed's projected two rate cuts could unlock financing markets and improve deal flow. Meanwhile, Ropes & Gray reports that 87% of leveraged finance professionals expect continued distressed activity. Recent IPO filings from Accelerant, McGraw-Hill, and NIQ Global suggest the public exit window may be cracking open for select portfolio companies.

Deal Spotlight: NCP Exits The Difference Card to Stone Point Capital

Transaction: Northlane Capital Partners (NCP) has announced the sale of The Difference Card (TDC) to funds managed by Stone Point Capital. Founded in 2001 and based in Mount Kisco, New York, TDC offers cost-containment solutions that enable employers to reduce healthcare insurance expenses without compromising benefit quality or increasing employee out-of-pocket costs. Its platform blends plan design consultation with a proprietary benefits debit card model to deliver measurable savings and enhance benefit flexibility for mid-sized and large employers.

The acquisition marks a continuation of Stone Point’s growing focus on healthcare-adjacent financial services platforms. Commenting on the deal, Chuck Davis, Chairman & Co-CEO of Stone Point, stated: “As healthcare costs continue to rise across the United States, The Difference Card stands out as a vital partner for businesses seeking affordable, high-quality health benefits. The company’s impressive growth over the past decade reflects its value to employers and employees alike, and we are thrilled to support its continued expansion and impact.”

Why It Matters: This transaction highlights private equity’s increasing focus on scalable healthcare platforms, particularly those that facilitate system-wide efficiency and cost reduction. With employer-sponsored health plans representing a significant portion of the U.S. healthcare spend, solutions like TDC’s are increasingly attractive as long-term cost pressures and compliance requirements intensify.

Trend Signal: Private equity’s interest in healthcare and life sciences continues to accelerate, driven by aging demographics, cost transparency mandates, and ongoing pressure for innovation across benefit and care delivery models. In particular, B2B platforms that enable cost control, care coordination, or insurance optimization are seeing strong demand.

Sponsor-to-sponsor transactions like this one are also on the rise. As institutional investors continue to deploy record levels of dry powder and seek de-risked assets with clear growth trajectories, mid-market healthcare platforms are frequently being acquired from one sponsor by another to pursue new phases of growth, operational enhancements, or roll-up strategies.

Stay Ahead in Private Capital Markets

As we move into the second half of 2025, the signals are clear: agility, focus, and timing will define success in today’s evolving private capital landscape. Based on Ropes & Gray’s mid-year data and our ongoing conversations across the PCG community, here are three strategies to guide your approach:

1. Prioritize Quality Over Quantity in Deal Sourcing:  With $1B+ transactions now making up 37% of all disclosed deal values and overall deal volume down, the market is rewarding firms that pursue fewer, higher-conviction deals. This is the time to double down on differentiated sourcing, platform add-ons, and sectors where fundamentals align with long-term macro trends.

2. Position for Strategic Exits Now: Exit values have surged even as volume declined, driven by a return of strategic buyers. Reassess which portfolio companies may be attractive targets for corporates seeking M&A-driven growth. Pre-emptive engagement, refreshed CIMs, and tailored narratives will help sponsors capitalize as liquidity returns.

3. Adapt Fundraising Messaging to New Capital Sources: With real asset and private wealth capital on the rise, fundraising strategies must evolve. Growth equity is gaining favor, and evergreen vehicles are attracting HNWIs. Aligning your strategy to these pools could unlock capital that others miss.

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

Thank you for reading this week’s Private Capital Compass. As we move through the second half of 2025, our goal is to help you stay ahead of the curve, whether you're sourcing deals, preparing exits, or navigating shifting capital flows. If you'd like to dig deeper into any of the themes discussed this week, I’d welcome the opportunity to connect. Let’s continue navigating this evolving landscape, together and with intention.