Our annual special report delves into the fast-changing world of tech investing
The report explores how private equity firms are working to future-proof deals in the software sector following the so-called ‘SaaSpocalypse’ earlier this year, and how sponsors are approaching AI risks and opportunities more broadly across the tech ecosystem. Plus, we look at what’s driving growing PE interest in sectors such as cybersecurity and the space economy, as well as analyzing the latest tech-focused fundraising trends.
The key trends in tech investment
Tech is gradually reclaiming private equity’s affections – but threats lie ahead.
Can PE’s software assets dodge AI obsolescence?
The valuations rout affecting software assets may have been short-lived, but the rise of AI has fundamentally changed how private equity approaches these investments.
ANALYSIS
PREVIOUS COVERAGE
PE capital continues to target tech as strong fundamentals outweigh wider macro concerns
Private equity continues to back tech, with investors citing long-term trends, digital transformation and defensible revenue streams as key drivers.
LPs double down on tech as digital transformation accelerates
Funds with a technology focus continue to attract LP capital as tech products and services increasingly become a must-have across industry verticals.
EU’s AI Act triggers due diligence push for private equity investors
While the EU AI Act may not have a steering effect globally, private equity sponsors are working to stay ahead of regulations.
Adams Street: The return of the tech IPO
The IPO market is now open for quality tech stocks, and increased M&A activity will likely soon follow, say Adams Street Partners’ Brijesh Jeevarathnam and Robin Murray.
Seven deals signal PE’s rising appetite for patient engagement platforms
Private equity is zeroing in on healthtech investments that focus on technology-driven patient support.
Baker McKenzie: Tech market ripe for more mega-deals
Large take-privates and carve-outs are on the menu as PE firms seek opportunities to unlock and drive value, says Baker McKenzie’s Eric Schwartzman.
Succession planning becomes increasingly vital at tech portcos
Private equity firms should ensure CEO succession planning remains a priority for their tech portfolio companies, says Spencer Stuart’s Ali Angier.
Where next for wealthtech?
Private equity sponsors continue to target tech companies developing mission-critical technology for the lucrative and rapidly evolving wealth management industry.
DC Advisory: Medtech piques private equity interest
Regulatory stability, an abundance of dry powder and a strong pipeline of assets make medtech a compelling place to put capital to work, says DC Advisory’s Manish Gupta.
Strong signals for TMT fundraising
TMT-focused vehicles are getting bigger and more often closing on target, despite the wider fundraising malaise.
Goldman Sachs on the tech reset opportunity
Darren Cohen of Goldman Sachs discusses the recalibration occurring in the technology market and how digital innovation is driving change across industries.
Investors urged to fund ‘the seatbelts and airbags’ of AI
Impact investors could make AI safer and reap sizeable returns in the process, according to Impact Investor Global Summit panellists.
Law in order: 7 deals in the legal tech sector
A slew of recent deals highlight the legal sector’s race towards digital readiness.
KPMG: AI readiness now key to investment theses
Tech companies are well placed to answer PE sponsors’ growing questions about AI readiness, helping to buoy appetite for the sector, say KPMG’s Anuj Bahal, Patrick Carpenter and Greg Sward.
Predicting software’s future value muddied by AI disruption – GEM’s Caroline Dallas
AI uncertainty is challenging firm formation in the software space, says GEM’s Caroline Dallas.
Three key trends in tech investment
Despite a drop in fundraising, tech remains a promising sector for PE investing.
Regulation tightens its grip on tech deals
While the dealmaking climate may have been a little cool for the tech sector in recent years, regulators have been upping the heat on the market and a swathe of new rules look set to impact new transactions.
Permira on Gen AI’s role in driving product leadership
For portfolio companies, investing in generative AI offers an asymmetric risk return distribution with a positive skew, says Permira partner and co-head of technology Michail Zekkos.
Cybersecurity sparks back to life
Following a cooldown in deals, solid long-term growth drivers and attractive exit options have seen private equity managers lean into the cybersecurity space in ever greater numbers.
Montagu: Does AI mean new tools for every trade?
AI’s rapid development offers new avenues for creating value in portfolio companies, but deploying the tools successfully will require judicious experimentation and consistent investment, say Montagu’s Christoph Leitner-Dietmaier and Dr Mark Spiteri.
The Future 40 on the tech landscape
Dealmakers featured in PEI’s 40 under 40: Future Leaders of Private Equity 2023 and 2024 lists share their insights on tech.
Deloitte on driving value in tech
As competition for assets increases, investors are getting creative in identifying value, say Deloitte’s Ryan Jones and Nick Israni.
The most appealing opportunities for tech investors today
Investments in artificial intelligence, software and even government-related assets are driving activity in the sector.
Investing in tech is taking flight
Presenting seven private equity deals in the travel tech industry – a sector that's expected to reach $21bn by 2032.
Nordic Capital: Tech innovations aid transition from legacy systems
Technology and payments are undergoing rapid shifts, creating attractive investment opportunities, say Nordic Capital’s Mohit Agnihotri and Fredrik Näslund.
Davis Polk & Wardwell: Creative deal structuring spurs an uptick
Sponsors are thinking outside of the box to find pockets of capital and get deals over the line, say Jack Orford and Robert Smith, sponsor finance partners at Davis Polk & Wardwell.
LPs are becoming more discerning about technology investments amid a sector-wide slowdown, but opportunities are still plentiful for firms that are willing to take a long-term view. This special report looks at what is driving investor appetite for tech investments and examines how GPs are balancing risk with reward when it comes to artificial intelligence.
How PE is balancing risk with reward on AI
PE firms are hoping to capitalise on the growing interest in generative AI while managing some of the risks it presents.
UBS Asset Management: Tech remains a top priority
Technology will continue to be a core sector in private equity portfolios despite the recent correction, says UBS Asset Management’s head of multi-manager private equity Americas, Nicola Goll.
Baker McKenzie: How to navigate regulatory change in tech investing
PE firms should keep antitrust, national security and data protection issues in mind when executing deals in the technology industry, say Baker McKenzie’s Michael Fieweger and Matthew Jacobson.
What are LPs looking for in tech investments?
We explore how LPs are approaching technology allocations in a tough market and what tech-focused managers are doing to stand out from the crowd.
The private equity industry has been left reeling by recent volatility in the technology sector. In this special report, we examine how PE is remaining optimistic about tech despite ongoing disruption, renewing its dedication to value creation across the life cycle of an investment, and focusing on specific verticals such as enterprise software, cybersecurity and climate-related technology to maximise returns.
The fast-moving technology sector continues to attract private equity capital, with a continuing stream of deals across verticals and growing ticket sizes, as well as significant tech-focused fundraising activity. As competition ramps up and valuations remain high, this Private Equity International special report examines the sub-sectors turning GPs’ heads and asks how managers can stand out in a crowded market.
Fast-paced technological change has seen tech cease to be an industry vertical in its own right and become a horizontal, touching every corner of the market as it becomes more integral to our lives. Fund sizes are ballooning as tech becomes a broader, deeper market than ever before. Private Equity International takes a deep dive into the sector.
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