DealMAX 2025 Middle Market M&A Conference Takeaways: Status Quo is Not an Option
Max Gartner recently joined Brightwave as Director of Sales, partnering with private market investors to accelerate diligence, unlock deeper insights, ensure greater consistency and drive higher-conviction investment decisions faster.
About Brightwave: Brightwave is the leading deep research platform for diligence, transforming how investment teams analyze opportunities. Purpose-built for financial research, Brightwave processes thousands of pages of deal documents, filings, transcripts, proprietary information and other critical documents in minutes, surfacing the most relevant information and ensuring rigorous source verification.
Exploring Trends in Middle Market M&A
At ACG’s DealMAX Middle Market M&A conference, conversations on the floor ranged from active networking and dealmaking opportunities to broader discussions around industry trends, macroeconomic volatility and the potential applications of AI at every stage of the deal cycle. In this blog post, we summarize some of the event’s major takeaways from Brightwave’s Director of Sales, Max Gartner, who spoke with leading private capital teams on the quickly changing landscape and their strategic responses.
The Evolution of Private Capital and Heightened Competition
One recurring theme among attendees was the ongoing commoditization of private capital. With more funds vying for the same fundraising opportunities and capital commitments, a consensus opinion was that proving differentiation is becoming increasingly difficult. The historical trend of large players dominating certain segments of the industry continues to hold true, while middle-market funds face increasing pressure from both sides, sandwiched between mega-funds on one hand and niche, sector-focused players on the other. As a result, developing a clear value proposition or operational edge is becoming a core consideration.
Beyond efficiency, another angle on the commoditization challenge is the need for a distinct identity. Many senior-level private capital leaders pointed to the same underlying question: “How can we show LPs that our approach stands out?” As the number of competitors continues to climb, thought leadership, investment discipline, technology adoption and deeper relationships with portfolio companies have emerged as tactics to stand out in a crowded field. Each of these requires commitment from leadership teams, but can pay dividends over the long run by creating differentiated outcomes.
One way in which successful middle-market funds are winning is by figuring out how to operate leaner and smarter. In a resource-constrained environment where adding headcount or analyst bandwidth isn’t always feasible, teams are aiming to improve efficiency across the entire deal cycle, from sourcing deals to managing pipelines to completing due diligence. Several conference attendees underscored the importance of tightening processes and innovating with new technological tools to maintain competitiveness.
The AI Imperative: From Origination to Exit
One of the most prominent topics of discussion at DealMAX was AI’s evolving role throughout the private equity lifecycle. In the last 6 months, there has been a notable anecdotal shift in how firms think about and evaluate AI: staying in the status quo is no longer an option. While the concrete use cases of AI are still being hashed out, many conversations centered around the ability to comb through massive document collections in the diligence process. With advances in natural language processing and deep research capabilities, the set of insights that can be accessed through AI (from niche performance metrics to shifts in key financial ratios) is growing exponentially.
By deploying AI-driven tools, firms can screen deals more quickly, gain conviction earlier and conduct more granular initial research before committing human resources. In this new environment where capital deployment is facing more competitive pressure, these technologies can become a force multiplier for lean teams to evaluate more opportunities without sacrificing thoroughness.
Lastly, we made an interesting observation around the enthusiasm for AI adoption crossing generational lines. Seasoned industry veterans who have seen several waves of technological disruption (from physical data rooms to the advent of spreadsheets in financial modeling) commented on AI’s potential as an even more significant evolution. At the same time, younger associates and analysts who are heavy users of consumer-grade AI tools in their personal lives have commented on the applicability of AI professional use cases. What unites many of these groups is a recognition that status quo processes cannot sustain a competitive edge indefinitely, especially in a more competitive and uncertain capital environment.
Capitalizing on Volatility: Turning Risk into Opportunity
While market volatility can curb risk appetite, another theme that surfaced across panels was how this turbulence can create prime opportunities to acquire assets that may be mispriced. Macroeconomic uncertainty may pressure sellers into negotiations in order to secure liquidity, presenting private equity firms with the chance to find undervalued targets. If leveraged correctly, these acquisitions can be significant alpha drivers in a firm’s portfolio.
Being well-positioned to take advantage of market volatility again hinges on reconsidering longstanding practices to stay competitive. One perspective we heard among DealMAX participants was the notion that the greatest competition is status quo bias. Relying on tried-and-true methods without re-evaluating strategy can prove costly when the marketplace is shifting rapidly.
Some investment leaders noted that many LPs are increasingly looking for high-quality reporting, timely updates and a clear understanding of the value creation plan. Market dislocation, especially in the middle market, can be the perfect forcing function to test new ideas and break free from entrenched practices. Whether that means implementing advanced technology or reorganizing investment teams, private equity firms that embrace change and test new strategies stand poised to gain the most.
Finally, volatility also underscores the importance of resource allocation. Several attendees shared anecdotes of junior team members acknowledging the lack of hours in the day to thoroughly review every new deal that crosses their desk. If a firm wants to capitalize on sudden price shifts and more frequent off-market transactions, it must solve for capacity constraints. For some, the solution may be hiring additional analysts or carving out specialized origination teams. For others, experimenting with new software and AI solutions can be a direct solution to capacity problems. Regardless of the specific approach, preparing to act swiftly in a fluid market can distinguish a good year from a great one.
The Path Forward for Private Capital
Our conversations at the DealMAX conference highlighted both the challenges and opportunities of today’s private equity landscape. As the number of funds competing for LP capital grows, firms are under more pressure to operate efficiently, develop clear differentiators and adopt new tools for sourcing and portfolio management. AI is becoming less of a vague futuristic concept and more of a present-day necessity for firms intent on maintaining or establishing a competitive edge.
For middle-market funds in particular, the path forward may involve scaling their capabilities by embracing emerging technology and modernizing traditional processes. While no one can predict the precise trajectory of markets or the long-term impact of AI on private capital, those who proactively adapt will likely emerge as tomorrow’s leaders. Above all, DealMAX underscored one resounding message: to navigate a complex market and stand out among many, private equity managers should remain open to new possibilities and bold in embracing the next wave of innovation.
Interested in learning more about how Brightwave is helping teams beat the status quo? Contact us to schedule a meeting.
