Private Equity in 2025: Market Shifts, Strategy, and the Rise of AI

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Mar 31, 2025

Hugh MacArthur, Chairman of Global Private Equity Practice at Bain & Company, shares insights from his 30 years in private equity. He discusses the shift from traditional financing to tech-driven strategies in deal-making. Hugh highlights the evolving role of AI and data analytics in enhancing decision-making. The conversation also covers adapting to rising interest rates and the importance of sourcing and value creation. He emphasizes demographic trends that shape investment opportunities and the need for transparency between general and limited partners.

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ANECDOTE

Bain's PE Practice Origins

Hugh MacArthur has been at Bain for 32 years and founded their private equity consulting practice 30 years ago.
This practice, initially focused on buyouts, has grown to encompass a third of Bain's global business.

INSIGHT

Early Mover Advantage

Bain's private equity practice was founded around 1995, nearly concurrent with the rise of private equity itself.
This allowed Bain to be at the forefront of the industry's evolution.

INSIGHT

Commercial Due Diligence as a Differentiator

Bain's PE practice initially focused on commercial due diligence, offering an external perspective on target assets and industries.
This external view helped inform investment decisions by looking beyond the immediate deal.

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Hugh MacArthur, Chairman of Global Private Equity Practice, Bain & Company

In this episode of M&A Science, Hugh MacArthur joins us to discuss the evolution of private equity over the last three decades—from the early days of deal-making and bespoke financing to today’s hyper-competitive, tech-driven landscape.

Hugh shares how Bain’s private equity practice scaled from an entrepreneurial idea to one-third of the firm's global business and dives into what differentiates top-performing firms. We explore sourcing strategies, value levers, post-acquisition success, and how PE firms are adapting to rising interest rates and new technologies like AI.

Things you will learn:

How Bain & Company built and scaled its private equity practice from scratch
The shift from margin improvement to growth-oriented value creation strategies
How private equity firms are evolving sourcing and financing models
The future of deal execution using AI and specialized data tools

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Episode Chapters:

[00:01:30] – Hugh’s background and the founding of Bain’s PE practice

[00:03:00] – Evolution from buyouts to a broad private assets approach

[00:04:30] – Bain’s entrepreneurial origins in private equity

[00:07:00] – Commercial due diligence: Bain’s unique differentiator

[00:12:30] – Market valuation trends and EBITDA multiples over 30 years

[00:14:30] – Industry sector evolution: from industrials to tech and healthcare

[00:20:00] – The impact of software and growth on value creation

[00:22:30] – Changes in deal sourcing: proprietary to competitive

[00:24:30] – Rise of private credit and changes in deal structuring

[00:29:30] – Value creation strategies: growth vs. cost-cutting

[00:33:00] – Buy-and-build strategies and integration challenges

[00:55:00] – Role of AI and advanced analytics in deal execution

[01:00:00] – Growth of private markets and increased retail access

[01:04:00] – Common mistakes PE firms make during acquisitions