Private Equity’s New Playbook: Operational Alpha in a High-Multiple Era

McKinsey’s 2026 private equity analysis reports record-high buyout multiples in 2025, including for $500M+ buyouts.

The core categories with the greatest increases in deal value were healthcare, technology, and energy – for a second year in a row. Health is still going up from pandemic years (with both innovation and advancements there), and AI is pushing high the energy needs and technological advancements (hardware, LLMs, ML analysis, and data-driven businesses).

➡️ The stock market performance also plays a unique role over the past few years. The S&P 500 has exceeded buyout averages over the past 3 years. With similar volatility (measurable risk) and very high liquidity (near-instant) compared to 10-year PE windows.

This struggle led to the influx of FP&A, RevOps, data and web engineering, and AI augmentation contracts at DevriX over the past 18 months, with brand consolidations, rollups, synergies, data governance, and more effective means of managing acquisitions in the first 100 days through the hold period.

With a growing number of PE firms (close to 20,000 in the US alone), going down market for supplemental acquisitions, rollups, and synergistic buyouts has become more common than not. I’ve spoken with 3 different M&A advisors this week alone operating in $2M – $20M EBITDA ranges, all seeing an influx of PE deals in the last two years.

Just as financial engineering is no longer sufficient to turn a company around, partners are shifting into new categories, business sizes, and acquisition theses, a new territory previously untapped during the 2010s. Bringing some of the SME best practices to facilitate agility and operational efficiency is top of mind for many partners in our immediate circle.