8th Private Equity Europe Forum: key insights

We had the privilege of attending the 8th Private Equity Europe Forum on 16-17 September 2025, which brought together a distinguished group of LPs, GPs and advisers from across the continent. The event provided a valuable forum for discussing the pressing challenges and emerging opportunities currently shaping the European private equity landscape.

Bern Gilbey, our National Head of Tax, moderated a standout panel to discuss the theme of “Finding Alpha” alongside industry experts Emma Watford, Partner at Bridgepoint Group, Henri Topiol, Partner at Montefiore Investment and Edouard Guigou, Partner at Eurazeo, exploring how firms are adapting their strategies to deliver differentiated returns in shifting macroeconomic environments.

2025 so far: prudent progress and cautious creativity

While the beginning of the year witnessed significant momentum, ongoing geopolitical uncertainties, persistent inflation and elevated interest rates (by recent standards) have prompted investors to adopt a more measured approach to capital deployment. Some attendees described the market as being in a “happy equilibrium”, with neither excessive pressure to deploy nor excessive caution, suggesting current conditions were perhaps more the “status quo” (looking at a longer-term period). Another recurring theme was the gradual convergence of buyer and seller expectations regarding valuations as market conditions stabilise.

Exit strategies unsurprisingly featured heavily in discussions. Traditional avenues are now frequently supplemented by continuation vehicles and recapitalisations, reflecting a broader evolution towards bespoke deal structuring. The trend of longer hold periods, particularly for stand-out assets was reinforced by the observation that around 80% of carry is generated by just 20% of investments.

Evolving sector priorities

The influence of technological innovation was widely acknowledged as a transformative force, reshaping investment strategies, business models and operational processes. AI’s capacity to drive productivity improvements and its cross-sector implications were central to discussions both at the level of individual portfolio companies and fund management.

The energy transition featured prominently, particularly in relation to the growing demand for enhanced infrastructure and power capacity. This shift will continue to require significant investment in power generation, grid modernisation and storage capabilities.

Geopolitical developments have further intensified the focus on sectors such as defence and security. These areas are attracting heightened attention and capital flows, most notably where technology is or could be dual-purpose.

Asset-light business models continue to appeal to investors for their scalability and operational efficiency, particularly in sectors where digital transformation is accelerating.

Some GPs felt they had the best chance of “Finding Alpha” by maintaining a narrower sector focus and embedding themselves deeply in those sectors or sub-sectors, whereas others preferred a sector-agnostic approach; both stressing the importance of keeping abreast of the macro-conditions and latest trends.

Accelerating value and impact-ifying investments

Fund managers today need a clear value acceleration playbook that is put to work as soon as possible post-investment, both to drive growth and to win increasingly competitive processes. This is particularly relevant in buy-and-build strategies, where early operational alignment and strategic bolt-ons can significantly enhance scale and exit potential.

Panellists also discussed the difference between ESG-linked investments and impact investments. ESG considerations typically place emphasis on mitigating environmental, social and governance risks within portfolio companies, often with the aim of enhancing long-term value and ensuring regulatory compliance. However, as GPs and LPs increasingly question the effectiveness of ESG integration in delivering risk-adjusted returns, impact investing is emerging as a viable strategy that still has maximising returns at its heart.

By contrast, impact investments are designed to generate measurable, positive social or environmental outcomes as a core part of the investment thesis. This more proactive approach requires rigorous impact measurement and reporting and is increasingly attractive to investors seeking to address global challenges directly through capital allocation. One takeaway was that all investments have an impact, whether positive or negative, but not all are structured to intentionally measure or manage that impact. This distinction is becoming more important as investors look for clarity on how their capital contributes to broader outcomes.

AI was frequently cited as a tool to support this shift, particularly in enabling scalable data collection and KPI tracking across diverse portfolios. While there was enthusiasm about its potential to streamline reporting and tailor outputs to investor-specific frameworks, panellists acknowledged that AI is still evolving. Rather than delivering deep insights on its own, AI is currently best positioned to enhance transparency and efficiency, helping managers meet growing demands for customised impact reporting, especially in complex, multi-entity strategies.

Europe is a go and resurgence in the lower mid-market

Looking ahead to 2026, the outlook for European private equity is notably positive. Stabilising macroeconomic conditions, continued technological advancement and the ongoing evolution of regulatory frameworks are expected to foster a more conducive environment for dealmaking and value acceleration. GPs continue to explore innovative ways of capital-pooling from the mass affluent to increase accessibility to private markets.

Despite the increasing allocation of capital to mega-funds, multiple GPs commented that the lower mid-market represented a “fun” place to operate, even for the bigger players.

With a purposeful sector focus, and increasingly innovative approaches to both sustainability, value acceleration and exits, it feels like European private equity is set to enter 2026 with a sense of cautious optimism.