If you have any questions or would like more information about Marktlink Capital and its funds as a result of this article, please feel free to contact us for further clarification.
In this blog, we take you through the key macro trends affecting private equity and venture capital and explain what this means for the investment strategy of Marktlink Capital.
The first major trend is that private equity and venture capital are growing as sectors. For example, companies are increasingly choosing to remain private for longer and not apply for a stock market listing. This is now possible because the private capital market is broader and deeper than before. Increased regulatory pressure on listed companies also plays a role in the decision to remain private for longer.
Furthermore, we expect that in 2025, opportunities will mainly lie in the segment commonly referred to as the (lower) mid-market, or the SME and SME+ segment of the market. For companies of this size, deals are less dependent on the now more volatile interest rates, and there is more room for operational improvements.Another trend expected to continue in 2025 is the popularity of secondaries.
The market for these investments is maturing, and more funds and investors are able to use this instrument to achieve impressive results with an attractive cash flow profile.
For venture capital, after years of relative overvaluations and 'free money' due to low interest rates, it is now a period of normalization. However, the major trends here are less in the economic sphere and more in the technological, as the rise of AI now presents significant opportunities for entrepreneurs to bring AI-related applications to the market.
The inauguration of a pro-business government in the United States is, on one hand, good news for private markets, but on the other hand, tariff barriers pose a risk for internationally operating companies. In Europe, political momentum is slowly building for further integration of the fragmented European capital market and the promotion of entrepreneurship.
What does all this mean for our funds? In the area of private equity, we continue to seek the best funds in Europe and the US in the SME segment, where the opportunities for value creation in this changing world are greatest. For venture capital, we will increasingly connect with parties that have the best vision for developing and commercializing AI applications.
