Welcome to the first edition of The Private Capital Compass! Designed to be read in minutes, each edition delivers five essential stories from the week, carefully selected and summarized to keep you current without the clutter. You’ll also find fresh insight in our weekly blog from the PCG team, offering perspectives on emerging trends, deal flow, and strategy shifts.

Our goal is simple: provide clarity, context, and actionable perspective in a fast-moving environment. Whether you’re a capital allocator, GP, advisor, or market observer, The Private Capital Compass is here to help you stay sharp and informed.

Compass Points

Key insights at a glance

• Geopolitical shocks: Israel-Iran tensions rattle markets; Dow down 2%, S&P 500 down 1%, oil up 10% in days.

• Deal momentum: Q1 deal volume surges 45% year-over-year—large transactions drive value.

• Trade sales dominate: 82% of deal value now from strategic buyers, up from 59% in Q1 2024.

• Liquidity paradox: $1.2 trillion in buyout dry powder, but slow distributions to LPs.

• Action required: Pragmatic opportunism is the new playbook.

Market Pulse

Latest market snapshots

• Equities: Dow Jones (-2%), S&P 500 (-1%)

• Commodities: Brent crude (+10.3% to $98/barrel)

• Deal Flow: Q1 PE deal value is more than double 2024 levels

• Dry Powder: $1.2 trillion (24% available for 4+ years)

Deep Dive: The Paradox of Momentum and Stagnation

Private equity finds itself at the center of a storm that began far from Wall Street. The escalating Israel-Iran conflict sent immediate shockwaves through global markets, triggering a flight to safe-haven assets and spiking oil prices. Political uncertainty continues to dominate dealmaking conversations, with nearly three-fourths of GPs expecting tariffs to negatively impact deployment over the next 3–6 months.

Despite this turbulence, underlying strength defies easy categorization. First-quarter deal volume surged 45% compared to the same period last year, with large transactions such as Sycamore Partners’ $23.7 billion acquisition of Walgreens driving value to more than double 2024 levels. Growth equity is a bright spot, with deal count and value up 57% and 63% year-to-date, respectively. Technology remains a leader, but the focus has shifted toward companies with clearer profitability paths and less international supply chain exposure.

Most tellingly, trade sales now account for 82% of deal value, up from 59% in Q1 2024. This shift from sponsor-to-sponsor transactions signals that strategic buyers see opportunities that financial investors may be missing.

Deal Spotlight: 

Sycamore Partners & Walgreens

• Transaction: $23.7 billion acquisition of Walgreens

• Why it matters: Largest Q1 deal, exemplifies scale bets in volatile markets

• Trend signal: Corporate carve-outs gaining traction as tariffs reshape supply chains

Compass Call

Actionable intelligence for private capital professionals

• Target distressed assets: Focus on companies withdrawing guidance due to trade tensions.

• Refresh portfolio value-creation plans: Emphasize supply chain diversification.

• Expand geographic focus: Look to European and Middle Eastern markets as LPs reduce US allocations.

• Prioritize full exits: Satisfy LP liquidity demands over partial realizations.

• Accelerate the implementation of generative AI: Build sustainable competitive advantages.