What Changes at the Largest Private Equity Firms Mean for Deal-by-Deal Investing

If you haven’t read it yet, there is an interesting new article from Private Markets Insights highlighting Apollo Global Management CEO Marc Rowan’s interview with iCapital CEO Lawrence Calcano on The 19th Hole.

Several insights stood out to me as particularly relevant to stakeholders in deal-by-deal private equity investing.

First, there is an acknowledged shift in the market: capital is no longer the primary constraint — quality deal origination is.

The challenge today is not simply raising capital, but whether private equity firms can consistently originate attractive opportunities. This is particularly important in blind-pool structures. If a manager cannot deploy capital efficiently during the fund’s investment period, the economics and rationale of the entire structure come under pressure, leaving investors with slower-than-expected deployment and potentially suboptimal capital allocation.

Second, Rowan observes that successful firms tend to plateau when they become more focused on avoiding losses than on pursuing new opportunities.

This feels especially relevant at a time when LP commitments are increasingly concentrated among a relatively small group of large, established private equity managers. Their scale, track record and institutional infrastructure may signal stability. At the same time, Rowan’s point suggests that scale can also encourage excessive risk aversion — potentially resulting in more modest outcomes relative to smaller, more ambitious firms willing to take appropriate risks.

Third, Rowan expects the next five years to bring more change than the previous ten.

Technology and AI, higher interest rates, fragmented global trade and the broader transformation of private markets are creating a considerably more complex investment environment. From the perspective of the SBC Capital platform, this reinforces the potential advantage of deal-by-deal investing: greater agility, stronger investment-level selectivity and more direct control over capital allocation than is typically available through a traditional blind-pool commitment.

There is also an interesting implication for talent.

Many business-school graduates seek internships and entry-level roles at the largest private equity firms because of the name, structured onboarding, compensation and signaling value. Yet the leadership of those same firms is actively searching for new ideas and ways to innovate.

Past achievements and brand recognition alone do not secure a firm’s future.

For young professionals, the career decision is therefore not only about joining the most established name. It is also about choosing between being several layers removed from decision-making — where innovative ideas must travel through a long chain of command — and joining a smaller, more ambitious firm with greater risk appetite, more direct access to leadership and more opportunity to stand out by introducing genuinely innovative solutions and demonstrating the ability to drive growth.

In both investing and careers, competence and reputation matter — but agility, ideas and the willingness to take appropriate risks may matter even more.

Article: Ideas Became the Scarce Resource in Private Markets