Is Your PE Playbook Still the Right One for the Current Cycle?

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Jeffrey Diehl
Managing Partner & Head of Investments

Institutional investors are increasingly thinking about whether the private equity allocation strategies that served them so well over the past 20 years are still the right ones as higher rates, tighter financing and wider manager dispersion reshape the market. In this video, Adams Street Managing Partner & Head of Investments Jeff Diehl discusses why portfolio construction may need to evolve beyond large buyouts, why EBITDA growth matters more in a higher-rate world, how to assess alternative strategies without disrupting a program, and the upside and risks of AI.

Key Takeaways

• Private equity portfolios built around large buyouts and co-investments may need rebalancing in an environment that increasingly rewards smaller companies with greater potential to grow EBITDA faster, and with less dependence on multiple expansion or cheaper debt
• Higher-for-longer rates are reshaping the private equity playbook, putting more pressure on leverage-heavy strategies and increasing the premium on managers that can drive revenue growth, expand EBITDA, and create value through operational improvements
• If returns are lagging benchmarks, allocators may not need to overhaul their entire private equity program, but they should reassess portfolio construction, and consider increasing exposure to small and mid-market buyouts through partners with differentiated access
• AI is creating both opportunity and disruption across private markets, making manager selection and company-level diligence even more important, especially in venture, where early access matters, and in software, where not every business will benefit equally

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Adams Street Partners is a global investment firm managing a comprehensive suite of private markets investment solutions. The firm provides private equity and private credit strategies to institutional investors, growth capital to innovative companies, and evergreen funds that offer access to multiple strategies through a single, investor-friendly commitment. The firm also supports wealth advisors with private markets solutions structured to be more flexible and accessible than traditional closed-end funds. With over 50 years of experience, Adams Street leverages deep market insights, global relationships, and proprietary data as it seeks to help investors achieve long-term investment goals. The firm is 100% employee-owned, manages $76 billion in assets,* and operates out of 15 offices globally. Visit adamsstreetpartners.com

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Neelm Hameer
Vice President, Investor Relations
nhameer@adamsstreetpartners.com
+1 773 720 9748

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