Key takeaways:

• Small and mid-market private equity deals are showing resilience and flexibility in today’s market
• Secondaries and co-investments are unlocking new liquidity and value
• Evergreen funds are making private equity more accessible
• Innovation is crucial as venture capital and climate tech reshape the space

Why small and mid-market deals are driving the rebound

 Meena Ghandi and Stephen Catherwood, managing directors in private equity at JP Morgan Asset Management, made a strong case for focusing on the small to mid-market segment. “This part of the market tends to be more resilient and consistent,” said Ghandi. While global private equity exits dropped by around 70% from their 2021 peak to 2023, their portfolio—focused on the smaller end—saw only an 18% decline. 
 
This relative insulation is rooted in the flexibility and diversity of exit options available in the lower mid-market. “If you have a $500 million business, you can sell to sponsors, strategics, or even another PE firm. If the IPO window is closed, that’s fine,” Catherwood added. “You have a lot more degrees of freedom than if you’re sitting on a $10 billion asset.” 
 
Thanks to falling base rates, tighter spreads, and greater availability of debt, deal pipelines are filling once again. According to JP Morgan’s data, the share of deals priced at SOFR +550 bps or less jumped from just 10% in the second half of 2023 to 67% by early 2024. “We’re looking at a 200+ basis point reduction in cost of capital. That’s transformative in leveraged models,” said Ghandi. 

Fundraising remains challenging, but opportunity beckons

Despite the green shoots in deal activity, fundraising is still constrained. The number of private equity funds in market fell by more than 50% from 2023 to 2024, and capital raised declined by 25% according to JP Morgan. Notably, larger funds ($5 billion+) now account for 55% of all fundraising activity, up from 16% in 2015, as allocators concentrate their commitments. 

Yet for sophisticated investors, the tough fundraising environment creates an opening. In the US, JP Morgan is capitalising on “seasoned primaries” and “stapled” deals—strategies that allow investors to gain visibility into partially invested portfolios or pair co-investments with primary allocations. “We’ve done about 700 of these types of investments,” said Ghandi, noting a 31% return from a $1.7 billion sample.

Secondaries as a strategic lever

The secondary market has also emerged as a strategic lever. While once seen as a way to offload troubled assets, secondaries are now a mechanism for liquidity, portfolio management, and accessing high-quality positions at discounts. “The perception has changed,” said Catherwood. “It’s about optionality and optimisation—not distress.” 
 
JP Morgan is targeting deals where it holds informational advantages—such as buying into funds where it sits on the advisory board. In one example, it offered a 14% discount for a secondary purchase but knew from inside information that write-ups were coming. “By the time the deal closed, the effective discount was closer to 30%,” said Catherwood. 
 
Continuation vehicles are another bright spot. In 2024, they accounted for 40% of all high value exits. These GP-led secondaries allow firms to hold on to winners while offering liquidity to Limited Partners (LPs)—a “win-win,” as Ghandi described it.

Making private equities more accessible

Growing in popularity are evergreen private market funds.  Multi-manager by design, these funds provide exposure to a range of private market managers and strategies.

“Our evergreen strategy is 90% in co-investments and secondaries,” said Ghandi. “It’s shorter duration and highly diversified.” 

“This isn’t just one sponsor’s deals. You’re getting Grey Hill, Barnes, KKR, and others all in one portfolio,” said Catherwood.

Kunal Shah, head of private asset research at iCapital, emphasised the need for greater access, technology, and education in the private markets. “Only about 10% of global equity is in private markets, but that share is growing,” Shah said. “We’re focused on building platforms and tools that simplify the allocation process for advisors and clients.” 
 
Manager selection, he noted, is also pivotal: “Alpha from selection ranges from five to six percentage points in green assets, and up to 20 points in venture capital. In VC, especially, choosing the right manager makes or breaks the strategy.”

VC’s recalibration—and climate tech’s surge 

On that note, Sean O’Sullivan of SOSV offered a deep dive into the world of venture capital, where exuberance in 2021 has given way to a divided and more sober market. “The late-stage boom collapsed in 2023, but early-stage investing remains robust,” said O’Sullivan. “That’s where we’re focused—on real innovation with long-term potential.”

SOSV, a multi-stage VC firm, has carved out a niche in climate tech, where O’Sullivan sees massive opportunity. “We invest in companies that create new models—ones that render harmful legacy models obsolete,” he said. Examples span from lithium extraction and energy storage to alternative proteins and vertical farming.  

The firm’s support goes beyond capital. It offers wet labs, engineering expertise, and an extensive syndicate of follow-on investors. “Our goal is to de-risk early-stage science and help it scale,” said O’Sullivan. 

He warned against simplistic solutions to the climate crisis—such as direct air capture—and instead, emphasised the need to reinvent core systems of production. “We can live abundant lives and consume what we do now—or even more—if we change how we produce.”  

Implications for wealth managers 

For professional wealth managers, the implications are clear: private equity is no longer just about backing mega-buyouts and waiting seven to ten years for an IPO. The market is fragmenting and evolving, becoming more nuanced, more strategic, and increasingly accessible.

Mid-market and small-cap funds are outperforming by virtue of their flexibility and valuation discipline. Secondaries and co-investments are offering asymmetric return profiles with greater visibility and shorter durations. Evergreen structures are opening the door for individuals without compromising on quality or diversification. 

At the same time, venture capital—once the Wild West of alternatives—is professionalising. And in frontier sectors like climate tech, it offers not just financial return but long-term thematic relevance. 

As traditional portfolios falter in their diversification power, alternative assets—and private equity in particular—are emerging as the new core. But success will require more than a simple reallocation. It demands discipline, manager insight, and a willingness to think beyond conventional benchmarks.