149 data requirements, and organizational conflict of interest rules, and are scrutinized under foreign direct investment and national security review frameworks. In this environment, engaging experienced advisors is not merely advisable — it is essential. As defense budgets continue to expand and governments across the world invest in platform modernization, supply chain resilience, and next-generation capabilities, aerospace and defense will remain one of the most attractive, but also one of the most demanding, sectors for private equity capital. Retail Of all the sectors tracked, retail produced the most growth. Retail deal value grew 197% year over year in 2025, despite retail deal count falling 6%, making it the fastest-growing sector by deal value in the entire buyout universe. The retail surge is the best example of the boom in corporate M&A and the public-to-private wave that defined much of 2025’s deal activity, including the buyout of retail pharmacy chain Walgreens Boots Alliance for $23.7 billion. PE funds operating in the retail space must contend with constantly shifting consumer patterns that require significant operational expertise. Real estate portfolios, private labels, loyalty programs, and supply chains are all critical factors in operating a successful retail business while staying ahead of disruption cycles. PE funds must retain credible advisors to navigate consumer protection regulation, product liability, data privacy obligations, and employment law compliance — considerations that may extend cross-border. However, given the deal values at stake, these compliance burdens are well worth bearing. Healthcare Healthcare deal value grew 115% in 2025, making it among the fastest-growing sectors in the buyout universe by deal value — yet healthcare deal count fell 2%. More capital is flowing into fewer, larger, more carefully selected transactions. Within healthcare there is a broad spectrum of subsectors: (i) healthcare provider facilities and services; (ii) pharma and biotech; (iii) medtech and healthcare equipment; and (iv) life sciences tools and services. This diversification across subsectors is appealing, as each offers a PE fund a distinct risk and return profile. For PE funds and their advisors, genuine expertise in this space commands a premium — but one that can yield significant rewards. Regulations, reimbursement frameworks, anti-kickback compliance, and foreign ownership restrictions are all considerations that must be carefully navigated. Yet this complexity has not deterred sophisticated PE funds from investing in the sector. Renewables and Energy Utilities and energy deal value grew 75% in 2025, and deal count grew 5% — one of only two sectors, alongside industrials, to see both volume and value increase simultaneously. This combination signals broad, sustained demand across transaction sizes rather than a handful of megadeals. The global boom in AI and data infrastructure is creating extraordinary demand for new energy capacity. Aligned Data Centers, acquired for $40 billion and subsequently sold to BlackRock and a consortium of technology groups seeking AI computing capacity, was among the defining transactions of the year. Large funds are both competing and partnering with capital sources such as sovereign wealth funds and strategic corporations in this space. The volume of capital pursuing energy and infrastructure assets is unprecedented, compressing private equity’s share of deal flow — but also creating co-investment and structuring opportunities for those with the relationships and legal infrastructure to execute complex multi-party transactions. PE funds and their advisors with expertise in this space will be essential to these co-investment opportunities, demonstrating operational value beyond capital. These investments require navigation of regulatory regimes, permitting timelines, environmental compliance, and cross-border considerations — including those affecting supply chains. Despite these complexities, energy and infrastructure remain among the few sectors benefiting from sustained structural tailwinds in the current market. Technology Technology deal value grew 30% year over year in 2025, while deal count fell 11% — one of the sharpest volume declines of any sector. Over the past decade, revenue growth has accounted for 52% of value creation in the software sub-sector, while multiple expansion has contributed 42%, leaving margin improvement to account for just 6%. However, this historical pattern may no longer be a reliable indicator of future performance. Valuation has become the central challenge. IT budgets have come under pressure across the economy, meaning robust growth is less certain for many software companies. At the same time, intense competition for deals continues to keep technology valuations near all-time highs, despite elevated interest rates and financing costs. US — MERGERS & ACQUISITIONS
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