Private Equity: What Is Changing, and What It Implies

Three dynamics are reshaping the industry. A reading — and what it means for investors exposed to private markets.

For more than four decades, private equity prospered in an environment of low rates, abundant liquidity and expanding multiples. That environment now belongs to the past. What is playing out today is not a cyclical adjustment: it is a structural recomposition of the industry — in its geography, its concentration and its management tools. For investors who know how to read these transformations, this is precisely the moment where selectivity matters more than exposure.

I. The French Market: Real Depth, Continental Ambition

The French market stands as the leading private equity market of continental Europe — both in the scale of its participants and in the quality of the entrepreneurial fabric it finances, which has long been familiar with private equity. Where Anglo-Saxon funds concentrate heavily on software, French managers deploy capital across a broader set of sectors: industry, healthcare, B2B technology, essential services. This sectoral diversification is a durable source of attractiveness.

The long-term performance of French managers is superior to the European average. The explanation lies in their model: less dependent on leverage, they devote greater effort to operational value creation within the companies they support.

Their limitation remains scale. The €10 billion mark in assets under management represents the threshold from which large international pension funds can invest meaningful tickets without concentration constraints. Few French managers reach it. This is why the most ambitious among them have embarked on a European expansion — Frankfurt, Milan, Madrid, Amsterdam — which responds as much to a commercial logic as to a societal project: private equity must contribute to the reconstitution of European industrial, technological and energy sovereignty. This is a conviction we share.

II. Consolidation and Concentration: The End of Systematic Diversification

The turn of the cycle initiated by the rise in policy rates exposed a structural fragility of the sector: valuations that had become largely dependent on a low cost of capital and on the mechanical expansion of multiples. When both engines switched off simultaneously, portfolio company valuations adjusted — creating a gap between sellers and buyers that blocked market liquidity.

Distributions have reached their lowest point, as a percentage of net asset value, since 2010. The ratio of distributions to capital calls has turned negative. Institutional investors have responded not by retreating from private equity but by rationalising their allocations: more concentrated tickets, deployed with the best managers, rather than extensive diversification. This flight to quality has produced a striking concentration effect — the ten largest global managers captured 46% of 2025 fundraising.

This concentration has in turn fuelled a consolidation movement that we observe in several forms: funds taking stakes in management companies, large platforms absorbing specialist players, managers being integrated within insurance groups. The number of such transactions has tripled since 2023. The objective is twofold: amortising structural costs and internalising expertise that is both differentiating and necessary — artificial intelligence, data, financial engineering, deep sector knowledge.

III. The Secondary Market: From Emergency Tool to Active Management Instrument

The compression of liquidity did not go without an industrial response. Private equity developed and refined its portfolio management tools, turning the secondary market into a central lever — no longer merely an exit mechanism for investors seeking liquidity, but a genuine instrument of active management.

LP-led transactions — in which an investor transfers a portfolio to a secondary manager at a discount to recover liquidity — went through a first wave of growth. But the most significant transformation is the rise of GP-led transactions. These operations allow a manager to generate liquidity for investors while retaining a position in assets judged to hold strong remaining potential. They take various forms — single-asset continuation vehicles, strip sales, add-on financing, equity roll-overs — but share a common logic: entry occurs on preferential terms, and the manager is generally required to reinvest carried interest to ensure alignment of interests.

GP-led transactions have multiplied fivefold over ten years. They now represent more than 20% of exits from private equity funds. This is no longer a crisis tool: it is a management discipline.

Our Perspective

Private equity has reached USD 10 trillion in assets under management globally. At that scale, it is structurally correlated with macroeconomic and geopolitical cycles. The transformations we describe are not passing turbulences — they durably redraw who manages, how, and for whom.

Our conviction: in this environment, selectivity is not a defensive posture. It is the first condition of performance. Identifying managers who have built a genuine capacity for operational value creation — rather than those who simply benefited from the context of the past decade — requires close reading and constant presence within the ecosystem.

This is precisely what we do, through our multi-asset approach and our dedicated funds, for the clients of Côme Maison of Finance.

Data referenced in this note is drawn from established sector sources. It is provided as analytical material, not as forecasts. This article does not constitute investment advice.