Dry Powder: The Private Equity Podcast Is the Classic Buyout Model Still Working?
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Jul 8, 2025 The podcast dives into the evolution of the buyout model in private equity, highlighting a growing divide between buyout and non-buyout assets. It discusses the rise of specialized funds, including ESG and impact-driven strategies, and the challenges traditional firms face in adapting. Moreover, it emphasizes the necessity for firms to analyze specific sectors carefully and adopt an analytics-driven approach for target evaluation, stressing the importance of innovation and a unique value creation playbook in today’s changing landscape.
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Specialist Funds Taking Share
- Buyout funds have grown at 7% annually over 10 years, while non-buyout assets grew at 17%.
- Specialist funds are taking market share from classic buyout funds increasingly.
Classic Buyouts Trapped in Middle
- Classic buyout funds feel trapped between mega-cap specialists and emerging managers with innovative ideas.
- This 'middle' position forces them to reconsider their strategy to create value and differentiation.
Five Questions for Future Growth
- Classic funds should assess adopting new products, focus deeply on sectors, use tech for target evaluation, develop digital value creation, and embed ESG.
- Clear answers in these five areas guide defensive and offensive strategies for future growth and differentiation.