Welcome to this week’s edition of The Private Capital Compass, brought to you by Private Capital Global (PCG), a Sparc Group company. Each week we distill the most relevant market developments, strategic insights, and value-creation trends shaping private equity and portfolio operations.

In this edition, we explore how private equity is reshaping professional services through technology and roll-ups, the booming demand for data centers amid AI-driven growth, and the expanding retail access to private markets as firms like Blackstone roll out new infrastructure funds. We look at the sharp divide in venture capital between AI-fueled mega-deals and a broader funding drought, examine the growth of private credit under mounting regulatory and competitive pressures, and take a deep dive into President Trump’s executive order that could open up $12 trillion in 401(k) assets to private markets.

We also spotlight GTCR’s $4.8 billion acquisition of Zentiva from Advent International, explore the evolving secondaries landscape, and share updates from PCG’s own initiatives, including the upcoming MedTech Capital Connect Dealmaker Summit.

Compass Points

Key insights at a glance:

• Private Equity’s Expanding Role in Tax, Audit & Accounting: A new white paper from the Thomson Reuters Institute finds that private equity is modernizing the tax, audit, and accounting industry through technology upgrades, streamlined governance, and roll-up acquisitions, but many firms remain hesitant. While PE-backed firms are investing in AI, automation, and acquisitions, 57% of professionals surveyed said PE is not on their radar and 30% would decline an approach, citing cultural concerns, ROI pressures, and client service risks. Strategies differ by firm size: larger firms are more open to PE or public ownership, midsize firms lean on selective acquisitions or minority capital, and smaller firms rely on traditional financing. Alternatives such as ESOPs, mergers of equals, and family office backing are also gaining traction, while across all models, firms are prioritizing advisory expansion, technology modernization, and market-based valuations to stay competitive.

• Private Equity Eyes Expanding Data Center Market Amid AI and Infrastructure Growth: The global data center market, valued at $91.9 billion in 2024, is projected to more than double by 2030 as AI, cloud migration, and rising digital workloads drive demand for computing and storage capacity. Private equity is increasingly active in this sector, with opportunities spanning real estate, utilities, power infrastructure, and colocation development as hyperscalers shift toward leasing. The United States leads global development, though Asia Pacific and the Middle East are ramping up, with forecasts pointing to a $214 billion construction market by 2030 and nearly $7 trillion in total ecosystem spend. Key challenges shaping investment strategies include zoning, land and power availability, sustainability requirements, and regulatory scrutiny, particularly in Europe. 

• Expanding Retail Access to Private Markets Through Infrastructure Funds: Private equity firms are increasingly opening access to private markets for individual investors, with infrastructure emerging as a key focus. Blackstone’s launch of BXINFRA Lux, a European long-term investment fund (ELTIF), reflects the broader trend of democratization, where traditionally institutional-only strategies are being adapted for eligible retail and wealth management channels. These vehicles provide exposure to long-duration assets such as digital infrastructure, energy, and transportation, aligning with global demand for stable income and capital appreciation opportunities. As regulators in Europe and beyond create pathways for individuals to participate in private equity, credit, real estate, and infrastructure, firms are rolling out new structures to capture this growing segment of investors seeking diversification beyond public markets.

• Venture Capital Split Between Hot AI Deals and Funding Drought Elsewhere: The venture capital market is showing sharp divergence, with AI, cybersecurity, and defense tech companies attracting record funding rounds and valuations while many startups in other sectors struggle to secure term sheets. Chainguard, a software supply chain security firm, raised $500 million in two rounds without a formal pitch deck, while OpenAI’s reported $500 billion valuation and Anduril’s $30.5 billion raise highlight outsized demand for select categories. Investors noted some companies receive double-digit competing offers, a rarity in recent decades, while others cannot raise at all. Debate continues over whether AI has entered a bubble, though firms like Sapphire Ventures point to faster-than-ever revenue growth. The sector remains marked by both exuberance in AI-driven opportunities and uncertainty over broader market participation.

• Private Credit Growth Meets Regulatory and Competitive Headwinds: Private credit continues to dominate allocation strategies, with 99% of surveyed senior lending professionals in the U.S. and Europe reporting exposure to direct lending and more than a third identifying it as their largest private credit position. But the outlook is not without challenges: 37% of respondents cite heightened regulatory scrutiny as the greatest threat to sustained growth, while competitive pressure has become the top concern in the broadly syndicated loan market, with 30% naming it the single biggest factor shaping activity—a sharp increase from last year. The findings underscore both the strength of demand for private credit strategies and the mounting structural pressures that could reshape the market’s trajectory.

Deep Dive: Trump’s 401(k) Executive Order and PE Democratization

On August 7, 2025, President Trump signed the Executive Order titled “Democratizing Access to Alternative Assets for 401(k) Investors.” The initiative aims to give Americans participating in defined contribution plans access to alternative investments: private equity, private credit, real estate, infrastructure, digital assets, and more, when plan fiduciaries deem them prudent. The U.S. Department of Labor (DOL) was directed to review and revise its guidance under ERISA, clarify fiduciary standards, consider safe harbors, and reduce litigation risk. Days later, the DOL rescinded its December 21, 2021 supplemental statement, which had cautioned that many fiduciaries were “not likely suited” to evaluate private equity in participant-directed plans.

This rescission marks the start of a new regulatory roadmap. The Executive Order gives the DOL 180 days to reexamine its guidance, clarify processes for fiduciaries, and potentially propose safe harbors under ERISA. The SEC and Treasury will also participate in the review. The EO defines “alternative assets” broadly to include private markets, digital assets, real estate, commodities, infrastructure interests, and even longevity risk-pooling strategies.

With up to $12 trillion in U.S. retirement assets in 401(k)-type plans, the shift could unlock enormous pools of capital for private capital managers. But opening the gates requires product innovation. Collective Investment Trusts (CITs) may be used as plan-level vehicles to deliver scale and integrate alternative allocations into target-date funds or blended strategies. Interval funds or semi-liquid structures that limit daily redemptions but allow periodic liquidity windows may help balance illiquidity. Default products like target-date funds could see capped allocations to private assets, offering indirect exposure within a diversified mix.

A key driver behind this push is the $1.5 trillion liquidity gap—the portion of retirement assets not currently deployed in private or semi-illiquid strategies due to fiduciary and regulatory constraints. Sponsors and managers see this as both a challenge and an opportunity. Designing products that are liquid, transparent, and compliant will be critical to bridging this gap.

Still, fiduciary risk remains central. Plan sponsors must ensure prudence and loyalty under ERISA, performing rigorous due diligence on managers, valuation methods, fees, and liquidity structures. Litigation risk is real if participants perceive fees as excessive, performance as inadequate, or disclosures as opaque. The EO explicitly directs the DOL to consider safe harbors that fiduciaries can rely on for protection. Transparency and participant education will also be essential to ensure individuals understand how private market investments differ from traditional stocks and bonds.

Private fund firms are already preparing semi-liquid and tokenized offerings tailored for retail investors. Interval funds, liquid-alt structures, and tokenized vehicles that allow fractionalized ownership and streamlined transfers could address liquidity and access challenges. Tokenization may also bring efficiencies in reporting and valuation, though regulatory scrutiny will be intense.

Challenges remain. Higher fees, limited liquidity, and opaque valuations all present risks for both fiduciaries and participants. Regulators will need to craft careful guidance to prevent abuses and ensure alignment between managers and beneficiaries. Whether this shift succeeds in improving retirement outcomes depends on execution. If private capital democratization delivers better diversification and returns net of fees and risks, it could be transformative. If not, litigation and backlash could slow progress.

In sum, Trump’s Executive Order signals a potentially seismic shift in retirement investing. Over $10–$12 trillion in defined-contribution assets may soon be partially redirected into private markets. The next 180 days, as regulators craft new rules and potential safe harbors, will set the stage for what could be one of the most significant financial innovations in decades.

Deal Spotlight: GTCR Buys Zentiva from Advent International for $4.8B

Transaction: GTCR has agreed to acquire Czech-based generic drugmaker Zentiva from Advent International in a deal valued at €4.1 billion ($4.8 billion). The transaction, reported by the Financial Times, marks a significant exit for Advent, which originally purchased Zentiva from Sanofi in 2018 for €1.9 billion. Under Advent’s ownership, Zentiva expanded across more than 30 countries and scaled its workforce to over 5,000 employees, solidifying its role as one of Europe’s leading providers of generic and over-the-counter medicines. While earlier reports suggested Indian drugmaker Aurobindo Pharma was a frontrunner with bids as high as $5.5 billion, GTCR ultimately secured the deal, reinforcing the appetite of U.S. private equity firms for European healthcare assets.

Why It Matters:  GTCR’s acquisition of Zentiva underscores several important trends shaping private capital investment in healthcare. First, it highlights the sustained investor appetite for generics and cost-accessible medicines, particularly as governments and health systems across Europe face mounting pressure to manage costs amid inflationary headwinds and aging populations. Global demand for generics continues to rise, with the market projected to grow at a 6–7% CAGR through 2030, reaching an estimated $740 billion in value.

The transaction demonstrates private equity’s growing willingness to deploy large-scale capital into Europe’s mid-market pharma landscape, where regulatory stability and resilient demand fundamentals make assets attractive despite macroeconomic uncertainty. Healthcare continues to command a central role in private equity portfolios, with the sector representing nearly 15% of global PE deal volume in 2023 according to Bain & Company.

The deal also highlights the evolving dynamics of the secondaries market. Advent’s ability to secure a strong exit at more than double its 2018 purchase price provides a case study in how GPs can crystallize value and return capital to LPs in a tight fundraising environment. At the same time, GTCR’s willingness to commit fresh capital illustrates how buyers are increasingly selective but willing to pay for high-quality, growth-ready assets in resilient sectors.

The next decade will be defined by how operators and innovators collaborate to scale businesses in an environment where AI, technology, talent, and capital are converging faster than ever.

Value creation now begins much earlier in the venture lifecycle. Investors who can integrate AI-driven insights into diligence, assess human capital as rigorously as financial capital, and align technology and finance during pre-acquisition assessments will set the pace for the industry. Equally important is ensuring seamless post-acquisition integration, where execution risk often makes or breaks returns. The firms that prioritize both people and platforms, building resilient cultures alongside scalable systems, will be the ones that consistently outperform.

We are entering a period where differentiation comes not from chasing the largest deal, but from cultivating the deepest capabilities. This means leveraging AI to sharpen decision-making, deploying smarter capital structures, and rethinking how teams are supported through rapid growth. The winners in venture capital will be those who not only see disruption but also shape it by embedding value creation into every stage of the investment journey.

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 AI, human capital, technology, and financial alignment are central to this new playbook. That’s why we’re bringing leading voices in the industry together in Austin, Chicago, Miami, New York and San Francisco for our upcoming events. Join us as we explore how operators are redefining value creation and subscribe to The Private Capital Insiders podcast to hear from industry experts.

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