Taking the private equity path to corporate growth, innovation, and M&A

^{Patrick Quay, Americas Private Equity Industry Leader, EY-Parthenon}

Patrick Quay advises private equity and corporate clients as EY-Parthenon’s Americas Private Equity Industry Leader. He’s worked with buyout firms and portfolio companies across a wide range of industries and M&A, and on accessing capital markets via equity and debt offerings.

Based in New York, he’s a Certified Public Accountant who focuses on assessing earnings quality, cash-flow forecasts, working capital targets, SEC reporting, GAAP accounting, purchase accounting, restructuring, and integration.

Shaun Beaney, Editor of Preqin First Close, asked Patrick about the M&A outlook for the US, private equity exits, AI, and doing tech deals.

EY-Parthenon’s latest monthly review of US M&A activity struck a careful balance between CEO optimism and geopolitical uncertainty. How are macro conditions affecting the way your clients evaluate risks and opportunities? 

We’re about 93% year over year in terms of M&A value through the first two months of the year – $500bn for $100mn-plus deals. So, notwithstanding the geopolitical events that started at the end of February, we've seen US deals pick up in a way that met our expectations.

Our latest CEO Outlook came out in January. With 1,200 CEOs surveyed, you saw a lot of optimism. Around 90% have an expectation of revenue growth in 2026, over 2025. Around 90% thought that profitability would increase over prior year, as well as productivity. However, where you saw caution, or an element of concern, was around how to manage cost.  

What’s the outlook?

You're going to see increasing M&A, as CEOs have growth expectations and realize that scale is one of the greatest ways to achieve those expectations and effectuate productivity. When we think about M&A for the remainder of the year – notwithstanding geopolitical shocks – we continue to be very bullish and recently updated our full-year expectation. ​​For private equity and corporate deals, we’re seeing deal value up 93% in the US, in line with our global expectations as well.

One of the big pressures on private markets has been fewer exits by private equity-backed businesses. What's your perspective? 

We’re seeing a pickup. You have a very sound structural standpoint to start from. The IPO market, for instance, was up more than 20% year over year in terms of volume in 2025. And you’ve seen the opening of the IPO window for the right private equity-backed portfolio companies. You have big names expected to come to market in the remainder of this calendar year. That’s a bit of a drawing force for other assets that have similar profiles and the appetite for a public exit.

You also have an overhang in terms of the age of portfolios in private equity funds, and still a significant amount, over $1tn, in dry powder available. From a structural perspective, you have availability of capital, you have exits required in many cases, and LPs are increasing pressure to exit businesses. We’re seeing a continued increase in the availability and expectations around private equity-backed company exits through the remainder of the year. 

Are companies pausing M&A in the current global circumstances?

It's still too early to tell what the current geopolitical events are doing to the M&A market, both buy-side and sell-side. Sensitivity analysis is being run on the cost-impact side of the equation. That's no different than any other times, whether or not the pricing action that everyone's seeing in the market is truly a blip or something that's going to be more sustained. 

How are you advising financial sponsors and private equity-backed companies to handle transaction and market risks?

The playbook is well set forth. For any businesses that have exposure to commodity-based inputs, there should always be sensitivity analysis to understand what happens in periods of rising or falling commodity costs. Most companies have a very good handle, based on previous shocks, in terms of what happens to their top and bottom lines, where you're seeing short-term, and perhaps more normal, increases or decreases in commodity-based input costs, such as oil prices. 

Private equity is better positioned to weather some of the impacts of current geopolitical events than in the past because of the experience of prior shocks.

In Preqin First Close, we often discuss digitization, automation, and, of course, AI. Are these trends reshaping the buyout market?

Our thinking is that productivity is going to increase year over year. You come back to the advances that people are making in digital and AI. That's one place where you're seeing both an investment opportunity for private equity and a lever for improving productivity and efficiency in businesses they've invested in. Right now, all roads lead to AI. One of our pieces of research suggested that, over the last five years, private equity has invested over $300bn in digital infrastructure.  
 
You're going to see more private equity participation in the digitization of the US economy. These firms are going to find places where they’re the best partner for growth. Then, as tools and products come to market, private equity firms will be among the first adopters to leverage them, to accelerate productivity and growth within their existing portfolio companies.

Which industries or themes are likely to be best for value creation over the next few years?

Technology is still the number one sector in terms of M&A volume and value. I don't think you're seeing people shifting away from certain sectors or into certain sectors because they can digitize. It’s more about driving greater growth or productivity. However, I think an evaluation of AI in any given industry is table stakes.

You’ve definitely seen a pronounced shift in the private equity marketplace toward helping businesses grow organically, drive productivity and efficiency, and seek growth. AI is going to be another lever in the toolkit for private equity.  
 

Shaun Beaney is Editor of Preqin First Close. It’s quick, easy, and free to subscribe here. 
 
Preqin, a part of BlackRock, links critical asset, fund, and performance data to support investment teams and M&A professionals with deal sourcing, due diligence, and company screening workflows across private markets asset classes. 

Special thanks to Kevin Carr and Maya Bronstein at M Booth, and Annie Lee at EY-Parthenon.
 
_{The views expressed are the opinions of EY-Parthenon as of March 2026. They do not constitute an endorsement, recommendation, or any other advice, and are subject to change. The content does not necessarily express the views of BlackRock, Preqin, or any of their affiliates. EY-Parthenon is not affiliated with Preqin.}