Private Equity Executives: M&A Not a Top Priority

A recent survey conducted by FTI Consulting, Inc. revealed that mergers and acquisitions (M&A) are not a top priority for the majority of private equity leaders in 2025. The 2025 Private Equity Value Creation Index found that only 9% of global private equity decision-makers consider M&A as their main focus this year. The survey, which included input from over 500 private equity leaders worldwide, highlighted the prevailing trend of prioritizing conventional cost levers like cost structure optimization and supply chain management over growth strategies.

Interestingly, artificial intelligence (AI) has emerged as the leading strategic priority for private equity firms in 2025 and is considered a key factor for exit readiness. Despite its growing importance in driving long-term value for portfolio companies, AI implementation remains one of the least frequently used and most challenging levers. Jiva J. Jagtap, Global Leader of Private Equity at FTI Consulting, emphasized that while cost optimization is crucial in uncertain market conditions, it is essential for firms to reinvest cost savings into capabilities and growth initiatives for sustainable value creation. Growth, although harder to achieve, holds greater value in the long run.

The survey findings also shed light on the use of technology and information technology (IT) as key value creation levers, with 84% of respondents utilizing them regularly. However, technology was identified as the top execution challenge at the portfolio company level. M&A, while a staple in the value creation toolkit, was rated as the worst-performing lever, with 67% of respondents indicating that it takes more than a year to realize the expected value from M&A deals. Successful M&A execution requires a collective effort from portfolio company leaders, operating partners, and deal teams to ensure strong operational governance, common objectives, and clear communication.

AI adoption is rapidly advancing, with 42% of private equity leaders viewing it as a major force transforming traditional business models. Despite its potential, AI ranks low among the value creation levers in terms of frequency of use and effective implementation. Commercial levers aimed at driving top-line growth, such as pricing optimization and sales and marketing strategies, remain underutilized, with only 23% to 28% of firms reporting frequent use of these levers for value creation.

Lars Faeste, EMEA Chairman at FTI Consulting, underscored the importance of translating innovation into tangible outcomes and disciplined execution in a complex business landscape. Success in value creation hinges on firms effectively embedding technology and growth strategies into their core operations to deliver sustainable value over time. As private equity firms navigate the evolving landscape of value creation, it is essential to bridge the gap between ambition and execution to drive meaningful impact.

The survey results offer valuable insights into the current priorities and challenges facing private equity firms in 2025. The shifting focus towards AI and growth strategies underscores the need for firms to adapt to changing market dynamics and embrace innovative approaches to value creation in an increasingly competitive environment.