Sunday, June 1, 2025

PE's pivot to the millionaire next door

Private funds start year in good form, mobility tech favors defense and EV & more
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The Weekend Pitch
June 1, 2025
Presented by RSM US
(Jenna O'Malley/PitchBook News)
Private equity is in the throes of its biggest and most consequential transformation since the industry's conception 50 years ago.

Change started with a trickle of firms, led by Partners Group in the early 2000s, creating novel "evergreen" fund vehicles that would court wealthy individual investors by offering them semi-liquid exposure to private market assets that previously were open only to pensions, endowments and the super-rich. Over the years, the wealth channel represented just a fraction of assets under management—until recently.

Today, having a wealth offering is becoming a commonplace, if not required, feature of the private fund industry, and it now makes up a sizable and rapidly growing chunk of fee-generating capital.

I'm Alexander Davis, and welcome back to The Weekend Pitch. You can reach me at alec.davis@pitchbook.com.

Unlocking private wealth's potential trillions of dollars has set off a revamp animated by a central theme: scale.

Fund managers across all private asset classes are devising semi-liquid interval funds and other vehicles to make the private-market model less complex and more affordable for an investor base of millions of high-net-worth individuals.

Solving that transition has pushed the industry into a steep learning curve.
read more
 
 
A message from RSM US  
Private equity must stay vigilant against cybersecurity threats
Cybersecurity remains a pressing concern for private equity as firms and their portfolio companies navigate an increasingly complex threat landscape. In an interesting twist, respondents in the Q1 2025 RSM US Middle Market Business Index survey reported that data breaches in 2024 were down from record highs; however, PE industry advisors warn that now is not the time for complacency.

Whether the drop in breaches resulted from improved security measures or a temporary slowdown in cyberthreat activity, the trend does not eliminate the underlying risks that PE firms and portfolio companies face.

While PE firms and their portfolio companies have made notable strides in cybersecurity, there are still opportunities to strengthen their approach and close existing gaps.

Learn about three key areas where deficiencies persist
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Trivia

Stablecoin transactions are emerging as a major part of B2B transactions, and VCs are catching on, investing in startups enabling businesses to use stablecoins in their preexisting infrastructure. The global supply of stablecoins was less than $10 billion five years ago. What is the supply now in 2025?

A) $19 billion
B) $129 billion
C) $239 billion
D) $549 billion

Find your answer at the bottom of The Weekend Pitch!
 

Did fundraising
get its mojo back?

(Carmen Mandato/Getty Images)
Private funds started the year off in good form, slightly beating 2024's pace, according to our latest Global Private Market Fundraising Report.

Post-election optimism for business-friendly policy added to hopes LPs may soon see capital returned. That optimism may have been premature, as uncertainties around global trade will likely be a headwind to fundraising throughout the year.

The report brings a major enhancement: Co-investment vehicles are now included in our data, offering a more complete view of private market activity. Data on over 3,000 such vehicles tracked since 1984 shows their share of commitments—though modest—hit a historic peak in early 2025.
Read the report
 
 

Defense, EV startups dodge
slowdown in mobility tech

(Getty Images)
VC funding for the mobility tech sector slowed in Q1—falling more than 25% quarter-over-quarter to $3 billion as investor caution continues to dampen early-stage activity, according to our latest Emerging Tech Research.

But dealmaking reflected growing VC interest in defense tech amid anticipated Defense Department budget increases, and investors also signaled a persistent appetite for EV innovation. Exits saw more action, surging to the highest level since Q4 2023, with M&A as the key driver.
Read the report
 
 

Quote/Unquote

(Jenna O'Malley/PitchBook News)
"It becomes especially painful when you are a new, emerging manager that wants to show skin in the game with your LPs and may not have had carry from a prior fund because you're just starting out."

—Martin Urdapilleta, co-founder of startup Henry Capital, speaking about GPs looking for workarounds to put up money to commit to funds. Henry Capital helps managing partners and principals buy into the vehicles raised by their firm. Read more about GP commitments to funds and Henry Capital's latest funding round here.
 

Stay tuned

Keep an eye out for these insights and research reports coming out this week:
  • Q1 2025 Insurtech Report
  • Analyst Note: Biotech VC Funds Evolution
  • May 2025 Global Markets Snapshot
  • Q1 2025 Pharma BioTools Report
  • 2025 Australia/New Zealand Private Capital Breakdown
  • Analyst Note: Supply chain and tariffs in clean energy
 

Trivia

Answer: C

The global supply of stablecoins has hit $239 billion. Stablecoins continue to become a hot conversation topic across the fintech landscape and have accounted for 2.9% of the $194.6 trillion cross-border payment market. Read more about VC investments in startups utilizing stablecoins here.

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This edition of The Weekend Pitch was written by Alexander Davis and Nadine Manske. It was edited by Andrew Woodman and Laura Schinagle.

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Brain Food: Guided by Beauty

Timeless wisdom in an accelerating world.  ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­

FS | BRAIN FOOD

June 1, 2025 - #631 - read online - Free Version

Welcome to Brain Food, a weekly newsletter offering timeless wisdom in an accelerating world.

Tiny Thoughts

*

The shortest path is the one you don't abandon.

**

Practice until you get it right, and you'll need perfect conditions.

Practice until you can't get it wrong, and conditions no longer matter.

***

Don't let your worst moments become your story.

You blow the presentation and spend the drive home scripting perfect comebacks to an audience that's already gone. Your relationship ends and you spend months replaying conversations that can't be changed. All the time spent perfecting the past is stolen from the future that's still waiting.

The past is a teacher, not a judge. Your next move matters more than your last mistake.

Insights

*

Anna Wintour with a dose of truth:

"People respond well to those that are sure of what they want. What people hate most is indecision."

**

Mathematician Jim Simons on being guided by beauty:

"You might think 'building a company that's trading bonds, what's so aesthetic about that?' What's aesthetic about it is doing it right. Getting the right kind of people, approaching the problem, and doing it right it's a beautiful thing to do something right."

***

The best storyteller in the world, Matthew Dicks, on the principle of but and therefore:

"A clear majority of human beings tend to connect their sentences, paragraphs, and scenes together with the word and.

This is a mistake. The ideal connective tissue in any story are the words but and therefore, along with all their glorious synonyms. These buts and therefores can be either explicit or implied.

"And" stories have no movement or momentum. They are equivalent to running on a treadmill. Sentences and scenes appear, one after another, but the movement is straightforward and unsurprising. The momentum is unchanged.

But and therefore are words that signal change. The story was heading in one direction, but now it's heading in another. We started out zigging, but now we are zagging. We did this, and therefore this new thing happened.

I think of it as continually cutting against the grain of the story. Rather than stretching a flat line from beginning to end, the storyteller should seek to create a serrated line cutting back and forth, up and down, along the path of the story. We are still headed in the same direction, but the best storytellers don't take a straight line to get there."

The Knowledge Project

I had the opportunity to interview the greatest football coach of all time.

I became a New England Patriots fan almost by accident; their games were simply the only ones broadcast in my area. Back then, the Patriots weren't much to watch, but everything changed when a certain coach arrived.

Bill Belichick has eight Super Bowl rings, but this conversation isn't about football. It's about the decisions that define greatness: why he kept Tom Brady when everyone said to cut him, why he sent a player home during the Super Bowl, and how four simple words—"control the game, not the score"—sparked the greatest comeback in sports history.

What follows is 90 minutes with someone who's spent five decades mastering the art of leading and winning.

+ Listen on: Apple Podcasts | Spotify | Web | YouTube

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Thanks for reading,

— Shane Parrish

P.S. Prince Rupert's Drop vs Hydraulic Press

Want to share this edition with a friend? Use this link: https://fs.blog/brain-food/june-1-2025/


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