Digging into private equity software exposure; fintech investment rose in 2025

S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.

As publicly traded alternative asset managers reported fourth-quarter 2025 earnings in January and February, one topic came up repeatedly: exposure to a software sector under threat from AI.

Private equity and venture capital firms have dialed back new investments in application software, which declined in volume for a third consecutive year in 2025, according to S&P Global Market Intelligence data. That decline coincided with growing awareness across public and private markets that AI-powered automation could erode the demand for some software products, culminating in an early February sell-off of technology stocks.

Analysts on the fourth-quarter 2025 earnings calls of large alternative asset managers persistently questioned executives about their exposure to software, which includes not just private equity portfolio company holdings but venture capital investments and loans to software firms through private credit funds. One of those executives, Blackstone Inc. CFO Michael Chae, acknowledged some investments may be at risk but said others are poised to accelerate.

"We expect larger, well-entrenched businesses to be better protected and, in many cases, beneficiaries of AI given the attractive moats and resources to invest in their own businesses and apply AI as a competitive advantage," Chae said.

Read more about private equity's exposure to the software sector.

CHART OF THE WEEK: Larger deals fuel surge in fintech investment value

⮞ Private equity and venture capital investments in the fintech sector totaled $18.54 billion in 2025, up 44% year over year, according to Market Intelligence data.

⮞ Deal volume was down, however, falling about 34% to 240 deals in 2025 from 365 deals in 2024.

⮞ The increase in average deal size is being driven in part by the premium valuations assigned to fintech companies seen as successfully integrating AI.

TOP DEALS

– EQT AB (publ)'s EQT Infrastructure VI fund and funds managed by Blackstone Inc.'s infrastructure unit agreed to acquire Spain-based waste management company Urbaser SA from Platinum Equity LLC in a transaction valued at about $6.6 billion. As part of the transaction, Platinum Equity will keep Urbaser's waste management business in Argentina.

– CVC Capital Partners PLC agreed to buy the animal nutrition and health business of Switzerland-based DSM-Firmenich AG for an enterprise value of about €2.2 billion. DSM-Firmenich will continue to own a 20% stake in the business, in partnership with CVC.

– General Atlantic Service Co. LP plans to purchase the remaining 58% stake it does not already own in European Wax Center Inc. in an all-cash transaction, valuing the hair removal salon at approximately $330 million. The transaction is expected to close in mid-2026. Moelis & Co. LLC and Ropes & Gray LLP are the financial and legal advisers, respectively, of the special committee of European Wax Center's board. General Atlantic's financial advisers are BofA Securities and Guggenheim Securities, while its legal adviser is Paul Weiss Rifkind Wharton & Garrison LLP.

TOP FUNDRAISING

– Vision Ridge Partners LLC raised about $2.4 billion for Sustainable Asset Fund IV. The fund targets firms in the energy, transportation and agriculture sectors.

– Montana Capital Partners AG raised $1.4 billion for MCP Opportunity Secondary Program VI at final close. The fund targets midmarket opportunities in North America and Western Europe and has already deployed over 50% of its capital.

– Partners Capital Investment Group LLP held the final close for its private equity coinvestment fund, Merlin IV, raising more than $1 billion. The fund focuses on middle-market buyouts, typically investing $25 million to about $100 million per transaction.

– Primary Venture Management LLC brought in $625 million for its fifth fund targeting seed-stage companies. The fund aims to invest in sectors including fintech, AI, healthcare and cybersecurity.

– Lower-middle-market private equity firm Union Capital Associates LP closed its fourth fund, Union Capital Equity Partners IV LP, at its hard cap of $450 million. Monument Group was the placement agent. The fund, which closed four months after launch, aims to invest in US founder-owned food and niche manufacturing businesses.

MIDDLE-MARKET HIGHLIGHTS

– Haveli Investments LP reached a deal to buy Montreal-based children's mobile game developer Budge Studios Inc. from General Atlantic. Latham & Watkins LLP and Davies Ward Phillips & Vineberg LLP were legal advisers to Haveli, while Paul Weiss Rifkind Wharton & Garrison LLP and Goodmans LLP provided legal counsel to General Atlantic. The Raine Group was the financial adviser to Budge Studios and General Atlantic in the transaction.

– KPS Capital Partners LP is set to buy precast concrete manufacturer and installer The Wells Cos. in a deal set to close during the first quarter. Paul Weiss Rifkind Wharton & Garrison was legal counsel to KPS. Taft Stettinius & Hollister LLP provided legal counsel to Wells, and Piper Sandler was its financial adviser.

– OEP Capital Advisors LP agreed to buy Italian specialty chemical company Giovanni Bozzetto SpA. Freshfields was legal adviser to OEP on the deal, and White & Case LLP was legal adviser to Bozzetto. Jefferies was financial adviser to Bozzetto.

FOCUS ON: PRIVATE EQUITY CONFIDENCE IN CENTRAL EUROPE

Private equity investors in central Europe expect deal activity in the region to pick up in 2026, while the availability of debt will likely grow further, according to a December 2025 survey conducted by Deloitte LLP.

Of the respondents, 56% said deals will increase in 2026, higher than 28% in the July 2025 survey. Respondents who expect activity to decline shrank to 8% from 11% in the previous survey.

About 51% of the respondents expressed confidence that the availability of debt finance will grow in 2026, up from 41% in the previous survey, while 44% said it will remain the same.

The survey covers Albania, the Baltics, Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Serbia, Slovakia and Slovenia.

______________________________________________

For further private equity deals, read our latest "In Play" report , which looks at potential private equity-backed M&A, including rumored transactions, each week.

For private debt news, see our latest private debt newsletter issued twice per month.