Ropes & Gray attended the SuperReturn International conference in Berlin last week, which attracted over 5,500 decision makers from the private markets industry who came together to share their outlook for 2025 and beyond.
Four key themes dominated the conversation:
- A renewed focus on Europe;
- Strong private equity appetite for founder and family-led deals;
- The central role of AI; and
- The critical importance of operational excellence in creating Alpha.
Renewed Focus on Europe
Europe is emerging as a region of opportunity for private equity investors. Stable regulatory frameworks, diversified economies, and a more disciplined approach to valuations have made the continent increasingly attractive. Julian Salisbury, co-chief investment officer at Sixth Street noted that there was real opportunity for private capital in Europe to invest at lower valuations for businesses with great fundamentals with a trajectory for growth and resilience to factors such as interest rate fluctuations.
That said, speakers noted the need for greater sophistication in executing transactions across Europe. Success requires deep local knowledge, local presence and tailored deal strategies to navigate a complex and competitive landscape.
Emphasis on Founder and Family-Led Deals
Another key theme was the growing interest in founder- and family-owned businesses among private equity investors. Ivano Sessa, co-head of European private equity at Bain Capital, emphasised that such deals require years of relationship building, high emotional intelligence, and careful execution.
He highlighted the importance of aligning with the family’s vision and working collaboratively to drive value and growth, as these businesses often carry the founder’s name and personal legacy. Sessa also pointed out that companies with strong fundamentals and long-term potential allow investors to stay committed through market volatility.
The Transformative Role of AI in Private Equity
In previous years, discussions at SuperReturn often centred on the potential of AI and the need to invest in the infrastructure to support it. There is no doubt that AI is now actively reshaping the private capital landscape.
Firms are leveraging AI across the investment lifecycle, from deal sourcing and due diligence to portfolio monitoring and exit planning. Tools like EQT’s Motherbrain are enabling real-time analysis of millions of companies, uncovering trends and opportunities that might otherwise go unnoticed. AI is also driving operational improvements, optimising everything from supply chains to customer acquisition strategies.
The Quest for Alpha through operational excellence
While finding great deals remains crucial, firms are placing increased emphasis on operational excellence – driving value creation post-investment to create Alpha in their investment portfolio. Rather than relying on financial engineering or multiple expansion, GPs were keen to underline their focus on improving business fundamentals.
This includes embedding operating partners, building out a deeper bench of management, modernising IT infrastructure, implementing AI to drive growth and efficiencies, implementing pricing strategies, focus on procurement and refining go-to-market approaches. Operational excellence in face of changing market backdrop is becoming a key benchmark of a firm’s real value-add, especially in a tighter market where traditional levers of return are becoming more difficult to pull.
