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 take a deep dive into technology as a value creation engine, drawing on insights from Eric Fouarge, Co-Founder of Ontrac Solutions and CloudMigr8, and part of the Sparc Group, a firm providing an advisory ecosystem to Private Capital firms around media & events, human capital, technology solutions, deal origination & capital connections. He shares practical approaches for accelerating cloud adoption, automation, and security at scale. We also highlight the latest episode of the Private Capital Insiders podcast, where Tony Ko, founding member of Qurrent, joins host Frank Scarpelli, Private Capital Global CEO, to unpack AI and tech’s impact on portfolio value creation. 

We also spotlight a set of important deals and market developments in Compass Points: KPMG’s latest perspective on AI and value creation, PE’s growing stake in the NFL, Merrill’s new UHNW alternatives platform, private equity’s intensifying cybersecurity push, and Carlyle’s $20 billion raise for secondaries. Together, these signals frame a rapidly evolving private markets landscape where precision, adaptability, and discipline are essential.

Enjoy the newsletter!

Compass Points

Key insights at a glance:

• Future-Proofing Value Creation with AI: KPMG’s latest value creation article underscores that artificial intelligence is no longer optional in private equity. According to KPMG’s 2025 AI Pulse surveys, 80% of executives now see generative AI as critical to competitive advantage, with 52% reporting revenue gains, 44% improved decision-making, and 40% productivity improvements. CEO involvement is rising sharply, with half now directly leading AI initiatives. Importantly, the mindset has shifted from a fear of missing out to a fear of becoming obsolete: 93% of leaders believe AI has already enhanced competitiveness, and 82% expect industry disruption in the next 24 months. For private equity, the challenge is not just deploying AI, but capturing and tracking its impact through robust KPIs that tie directly to EBITDA enhancement. The real opportunity lies in revenue optimization and building durable competitive advantages. 

• PE Continues to Invest in NFL as 2025 Season Kicks Off: As the 2025 NFL season began last night, a shift in league ownership continues that is prevalent across all major US sports: private equity firms are now key players in America’s most-watched sport. Following the NFL’s decision to permit up to 10 % minority stakes held passively for at least six years, firms like Ares Management (10 % of the Miami Dolphins) and Arctos Partners (10 % of the Buffalo Bills and 8 % of the Los Angeles Chargers) have become prominent stakeholders, opening new capital channels for valuation and strategic influence. Meanwhile, the New York Giants are moving toward a record-setting minority sale that could value the franchise at ~$10 billion, underscoring elevated valuation benchmarks and liquidity opportunity. This infusion of PE capital is reshaping how NFL teams are valued, unlocking new levels of external investment in an industry long dominated by traditional, family-owned models.

• UHNW Access to Alternatives Expands with Merrill’s New Platform: Merrill Wealth Management and Bank of America Private Bank have launched Alts Expanded Access, a new private market investment program designed for clients with a net worth of $50 million or more. The initiative allows ultra-high-net-worth investors to participate directly as LPs in funds across private equity, private credit, venture capital, and real assets, complementing the firms’ existing alternatives platform. Delivered through Bank of America’s open-architecture strategy group, the program partners with leading alternative managers, giving clients direct access to top-tier funds and emerging themes such as technology, healthcare, and sports. Advisors will be guided by the firm’s investment solutions group and CIO to help build diversified portfolios. This move reflects a broader industry trend as major players including Wells Fargo, Fidelity, and Goldman Sachs expand private market offerings for advisors.

• Cybersecurity Becomes a Strategic Priority for PE: As cyberattacks grow in scale and sophistication, private equity firms are elevating cybersecurity from an operational concern to a core pillar of investment risk management. A recent QBE survey of firms managing $1–50 billion in assets shows that cyber due diligence is now a deal imperative, with nearly half of firms scrutinizing regulatory compliance, supply-chain defenses, and employee training before acquisitions. The risks are real: over half of respondents reported cyber incidents across up to a quarter of their portfolio companies in the past year, with ransomware and extortion among the top threats. In response, PE firms are mandating stronger technical controls, governance policies, and incident response plans, while actively supporting portfolio companies with training, vendor management, and technical upgrades. Yet gaps remain, cyber insurance adoption is low, though more firms are moving toward expanded standalone coverage. 

• Secondaries Surge as Carlyle Raises $20 Billion: The private equity secondaries market continues to expand as Carlyle’s AlpInvest unit announced $20 billion in fresh capital to acquire LP stakes from investors seeking liquidity. The raise includes $15 billion for its flagship fund, $3.2 billion in co-investments, and an additional $2 billion from private wealth vehicles, reflecting growing demand from UHNW investors for access to secondary strategies. With more than 29,000 portfolio companies valued at $3.6 trillion sitting in PE holdings amid a dealmaking slowdown, secondaries have become a critical outlet for recycling capital—even if at discounted valuations. Much like private credit, which has risen as a flexible capital solution in tight markets, the secondaries boom highlights investors’ appetite for liquidity, yield, and diversification in an evolving private markets landscape.

Deep Dive: Technology as a Value Creation Engine in Private Equity

For today's private equity investors, technology has shifted from being a supporting function to a central driver of portfolio value creation. From cloud adoption to cybersecurity, digital strategies are no longer simply enablers—they are core to EBITDA expansion, resilience, and competitive positioning. As the pace of technological change accelerates, operating partners and portfolio executives must navigate both the risks and opportunities these tools create.

Cybersecurity as a Strategic Priority

Recent research highlights the extent to which cyber resilience has become a critical component of investment risk management. According to a QBE North America survey of PE firms managing $1–50 billion in assets, more than half reported cyber incidents at their portfolio companies in the past year, with ransomware and extortion among the most common threats. In response, firms are embedding stricter governance, mandating technical controls such as multi-factor authentication, and requiring formal incident response plans. Nearly all firms (97%) now demand ongoing visibility into portfolio company cyber incidents, and many are actively funding improvements in training, vendor management, and technical defenses.

The lesson is clear: cybersecurity is not a checklist item but a lifecycle priority, extending from pre-deal diligence to ownership and eventual exit. In an era where a single breach can cascade across interconnected digital ecosystems, treating cybersecurity as a core element of value creation is essential to protecting assets and preserving investor confidence.

Accelerating Cloud Value

Cloud adoption offers another compelling avenue for near-term portfolio value creation. As Eric Fouarge, Co-Founder of Ontrac Solutions, explains, the most effective first step for legacy-heavy portfolio companies is a full vendor and cost map. Understanding contract timelines, enterprise agreements, and existing commitments provides the roadmap for when and where transformation can happen. In parallel, conducting a comprehensive inventory of workloads often reveals immediate savings—typically 5–10% of spend—by eliminating idle or redundant resources. Simple right-sizing within cloud platforms can also yield quick, capital-efficient cost reductions.

Balancing Speed and Security

The urgency to deliver value quickly must be balanced with risk management. Eric Fouarge notes that in today’s environment of “running fast and breaking things,” PE-backed companies face constant cyber threats. His prescription for sustaining velocity while protecting assets includes building a secure-by-design cloud foundation through Infrastructure as Code, adopting Cloud Security Posture Management solutions like Wiz or Orca, and implementing continuous compliance testing to align with relevant frameworks. These measures establish guardrails that both enable rapid innovation and mitigate risk—a crucial balance in fast-moving investment cycles.

Measuring Value Beyond Cost

While cost takeout is often the headline goal, technology-driven interventions can unlock broader business impact. Fouarge cites automation projects that cut customer onboarding from 12 hours and four teams to less than one hour, fully self-service. Such process improvements not only free capacity but directly support revenue growth by removing barriers to scale. Similarly, reducing off-hour system alerts from 100 per week to one not only lowers costs but also improves employee productivity and retention. For operating partners, the mandate is to link technology outcomes to EBITDA through both efficiency and growth metrics: time saved, revenue unlocked, and resilience gained.

Communicating Proof Points

Finally, Fouarge emphasizes the importance of before-and-after storytelling when presenting results to deal teams or investment committees. Whether reporting on cost savings, productivity gains, or risk reduction, clarity and precision in quantifying outcomes is key. “If your numbers are wrong, everything comes into question,” he notes. By framing small but meaningful wins such as a 72% reduction in backup costs or a dramatic cut in labor hours.

Technology as a Continuous Advantage

From cybersecurity to cloud and automation, technology’s role in portfolio value creation has never been more central. What was once viewed as incremental back-office improvement is now a strategic lever for resilience, growth, and competitive advantage. For PE firms and their portfolio companies, the imperative is clear: embrace technology as a lifecycle priority, quantify its impact rigorously, and integrate it into every aspect of the value creation playbook.

Deal Spotlight: Sycamore Partners’ $10B Walgreens Take-Private

Transaction:  Sycamore Partners has closed its $10 billion acquisition of Walgreens Boots Alliance (WBA), marking one of the largest healthcare and retail take-privates in recent years. The transaction, structured at $11.45 per share with the potential for an additional $3.00 per share from future monetizations, could ultimately value the deal at $23.7 billion including debt and contingent payouts. As part of the restructuring, Walgreens will be divided into five standalone businesses: Walgreens, The Boots Group, Shields Health Solutions, CareCentrix, and VillageMD. Sycamore is partnering with longtime investor Stefano Pessina and his family, who have rolled 100% of their equity into the new structure.

Why it Matters: Sycamore’s $10 billion Walgreens take-private signals how private equity is reshaping challenged retail and healthcare assets through targeted break-ups and operational discipline. Walgreens Boots Alliance struggled as a public company, balancing a sprawling pharmacy footprint, costly healthcare bets, and a shifting consumer landscape. By splitting the business into five standalone companies, Sycamore is applying a familiar PE playbook: focus each entity, streamline governance, and create clear paths for turnaround or divestiture.

The deal also highlights private equity’s growing role in healthcare delivery. With Shields, CareCentrix, and VillageMD, Sycamore now controls businesses in specialty pharmacy, post-acute care, and primary care. Tailored capital and leadership could unlock value across these segments, though divesting VillageMD remains a likely step given its drag on financial performance.

For investors and operating partners, the Walgreens deal underscores three key implications:

• Break-ups and carve-outs will be a critical strategy to unlock value.

• Experienced operators are essential for executing customer-focused turnarounds.

• Healthcare assets remain attractive, but execution risk is high.

Private equity firms face a new reality: longer holding periods, higher return thresholds, and a liquidity crunch that demands precision over broad transformation. The technology playbook must deliver measurable EBITDA impact within months, not years. Here’s how to embed discipline into your value creation process:

• Week 1–2: Assess with Precision: Start with a systematic audit across the portfolio. Use the TRL framework to map technology maturity and apply RICE prioritization to rank opportunities. Focus on 2–3 near-term wins with the highest EBITDA impact, touching the most users with minimal resources. Capture gaps in integration, manual processes, and cybersecurity posture.

• Week 3–8: Deploy Automation Tactically: Target high-volume, rules-based processes where labor and error rates are high. Use the “frequency × frustration” lens to identify candidates. Launch pilots at 1–2 companies, measure savings rigorously, then replicate playbooks portfolio-wide. Quick automation can free capacity and protect margins within six to 18 months.

• Week 9–12: Execute Strategic Cloud Moves: Prioritize migrations where economics and agility align—development servers, disaster recovery, or seasonal workloads. Track savings, scalability, and resilience gains weekly. Cloud migrations can deliver immediate cost efficiency while positioning companies for growth.

• Ongoing: Embed Security as Value Insurance: Deploy baseline controls—MFA, endpoint detection, automated backups—within 100 days. Scale frameworks with company complexity, ensuring governance enables rather than constrains growth.

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 Private Capital Global, our mission is to keep you ahead of the curve by translating market shifts into practical playbooks. 

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