Becker Business Podcast: "Private Equity — The State of the Deal Market"

Host: Scott Becker
Date: October 11, 2025
Panelists:

• David Greer (Keystone Capital)
• Jeff Cockrell (McGuire Woods)
• Holly Buckley (McGuire Woods)
• Matt Wolf (Elliot Davis)

Episode Overview

In this special edition of Becker Business’ Private Equity series, Scott Becker convenes four expert panelists to discuss the current state of the U.S. private equity (PE) deal market in late 2025. The discussion covers market trends, deal volume and valuations, sector hotspots, the effect of interest rates, limited partner (LP) pressures, and creative deal structuring. Panel insights illuminate the evolving challenges and pockets of opportunity in a cautious but dynamic market.

Panelist Introductions & Investment Focus

[00:00–07:21]

• David Greer shares that Keystone Capital is focused on lower middle market investments, primarily service-based businesses (approx. 80% of their investments) in sectors like engineering, tech-enabled services, commercial and industrial services, and select food-related companies.
  • “We would define the area that we invest within lower middle market as, you know, starting with a platform that would be between $5 and $20 million of EBITDA... and at some point, we’re not the right partner anymore, and that’s often when it gets to $40 or $50 million in EBITDA and they find a bigger version of us to move on.” — David Greer [01:17]
• Jeff Cockrell introduces himself as a partner at McGuire Woods with deep specialization in healthcare and life sciences transactions, representing top PE funds in the field. He notes the power of industry specialization as a differentiator for legal practices.
  • “If you can combine good core technical skills with some very specialized knowledge, it really helps you cut through a lot of the competitive noise… has been really transformational in building my practice.” — Jeff Cockrell [04:34]
• Holly Buckley leads the healthcare department at McGuire Woods, focusing on both sponsor and portfolio company work, including regulatory and compliance issues.
• Matt Wolf recently transitioned to Elliot Davis, continuing valuation and economic analysis work primarily at the intersection of healthcare and private equity.

Macroeconomic Backdrop: Interest Rates & Exits

[07:21–09:02]

• Matt Wolf discusses interest rate expectations, emphasizing that any Fed rate cuts are already priced into the market, and significant reductions would signal broader economic weakness rather than spur a new deal boom.
  • “If [rate reduction] happens, it will be because of underlying weakness in the economy which... will do very little, if anything, to lower the cost of capital that we’re seeing in private markets.” — Matt Wolf [07:30]

State of the Deal Market: Volume, Valuations, and Sector Focus

[09:02–14:47]

Deal Activity and Asset Quality

• Holly Buckley:

  • Overall deal volume is up from earlier lows, but buyers are highly selective, focusing on "good assets" with solid infrastructure and compliance.
  • There’s consistent downward pressure on valuations from pandemic-era highs.
  • Regulatory scrutiny is increasing, especially at the state level, affecting timeline and structuring (especially for healthcare deals in states like Oregon and California).
    • “Platforms that are well scaled with good infrastructure, good relationships, tech enabled efficiencies and the like are still pulling in robust valuations.” — Holly Buckley [09:22]

• David Greer:

  • Reiterates the bifurcation between A assets (commanding high, mid-teen multiples) and lower-rated B assets (now trading at discounts).

  • Recurring revenue models — even non-traditional ones (e.g., regulatory-driven recurring service) — remain highly valued.

    • “An asset like that at the right size, it’s going to trade in a mid-teen multiple... if you have a B asset... you might be a turn or two below... deal volume down, year to date, challenging market. But that supply, demand imbalance, there’s still businesses that need and want to trade and there’s still a trillion dollars of undeployed capital.” — David Greer [11:38]

  • Recurring revenue is "the golden ticket," but even non-contractual, regulation-driven services can be favorably viewed as recurring.

    • Describing an elevator inspection company:
      “It’s not discretionary for the client... you need to inspect an elevator. So I see that as a regulatory demand driver... Even though it’s not SaaS under contract.” — David Greer [14:16]

Market Shifts, Pressures, and LP Demands

[15:04–22:45]

Asset Sales and Recaps

• Jeff Cockrell:

  • Larger platforms are now moving again, with pent-up deal activity re-emerging, especially for assets held 5+ years.
  • Lower-quality assets with stressed balance sheets are being pushed to the market.
  • There is increased pressure from LPs for distributions, prompting the use of debt recaps for A assets and forced sales for B/C assets.
    • “Ultimately that huge backlog of port codes that have been held for a long time is just going to have to clear.” — Jeff Cockrell [17:42]

• David Greer:

  • Explains firms typically hold longer for two reasons: strong assets worth keeping vs. delayed exits due to uncompleted value creation—LP patience varies.
    • “If you have some like-minded LPs... you can pursue a continuation vehicle or a debt-related recap... The other reason you’re looking to run out the clock is you haven’t executed on your value creation and you’re going to have an underwhelming exit.” — David Greer [18:57]

The Challenge of Fair Valuations

• Matt Wolf:
  • Mark-to-market valuations have become more complex due to varied deal structures (less cash, more earn-outs, higher rollover equity).
    • “There’s so much more noise now because of the way consideration is structured for new deals... making that comparison has become much more difficult.” — Matt Wolf [20:25]
  • True asset value cannot be known until realized upon exit; reported values often differ from eventual sale price.

Areas of Sector Excitement & Investment Opportunity

[23:02–33:19]

Healthcare Hotspots

• Holly Buckley:

  • Sees activity in women’s health, fertility, behavioral health (especially tech-enabled/AI-based), hospice, infusion, and tech-enabled services overall.
  • “Companies with really strong infrastructure in those areas, I've talked about, are going to be the AI assets and we're going to see a lot of competitive... processes.” — Holly Buckley [25:06]

• Jeff Cockrell:

  • Notes a shift of investor focus toward provider services that are not retail, not multi-site, and not doctor-led.
  • Increased investment in employer-based healthcare models and payer services to manage employer costs.
    • “Business models... built around that kind of cost containment for larger employers. That’s been a fascinating and pretty expansive area.” — Jeff Cockrell [26:58]

Broader Market Opportunities

• Matt Wolf:

  • Flags a rise in corporate divestitures, as companies and health systems shed non-core assets in today’s higher-rate environment.
    • “We’re seeing more a sort of small group of sponsors emerge as... very good at taking that corporate divestiture, creating value, and then exiting.” — Matt Wolf [27:36]

• David Greer:

  • Outside healthcare, keen on infrastructure-adjacent plays (“froth adjacent”), like construction/project management tied to transportation or water infrastructure federal spending.
  • Data center services—especially firms specializing in retrofitting/modernizing older sites—represent an overlooked, high-margin opportunity.
    • “You look at the billions of dollars that are being announced... the world of service providers around that are choking on the new construction. I think there’s a whole market of renovating and retrofitting existing data centers... I think there’s a huge opportunity there.” — David Greer [32:08]

Memorable Quotes

• “Platforms that are well scaled with good infrastructure, good relationships, tech enabled efficiencies and the like are still pulling in robust valuations.” — Holly Buckley [09:22]
• “There’s a difference between the value and the price. Right? So the value is sort of a hypothetical construct, and then the price is... whatever you end up exiting at.” — Matt Wolf [22:53]
• “If you have a fantastic asset that has a great future... why get rid of it?... The other reason you’re looking to run out the clock is you haven’t executed on your value creation and you’re going to have an underwhelming exit.” — David Greer [18:57]
• “Business models... built around that kind of cost containment for larger employers. That’s been a fascinating and pretty expansive area.” — Jeff Cockrell [26:58]

Key Timestamps

• Panelist introductions & personal philosophies: [00:00–07:21]
• Macro commentary on interest rates & exits: [07:21–09:02]
• Private equity deal activity and asset bifurcation: [09:02–14:47]
• LP pressure, recap strategies, and the complexity of valuations: [15:04–22:53]
• Exciting sectors: healthcare, divestitures, infrastructure, data centers: [23:02–33:19]
• Wrap up & closing remarks: [33:19–end]

Final Takeaways

The private equity market in late 2025 is marked by heightened selectivity, a focus on asset quality and recurring revenues, evolving regulatory complexity, and pent-up exit pressures. While overall valuations and deal volumes have come down from historic highs, competitive multipliers and rich opportunities remain for premium assets, especially in tech-enabled healthcare segments, specialized services, divestitures, and infrastructure-adjacent businesses. Creative deal structuring, robust valuation debates, and growing LP demands set the tone for the months ahead.