Survey highlights value creation strategies emerging trends like AI and ESG as key levers for success amid tariff and trade challenges.
SYDNEY, September 10, 2025 – Leading global professional services firm Alvarez & Marsal (A&M) has released its latest report, offering a comprehensive analysis of the Australian private equity (PE) landscape in 2025.
The findings reveal that Australian PE funds are navigating a complex macroeconomic environment, marked by geopolitical volatility, trade disruptions, and extended holding periods. Despite these challenges, the industry remains cautiously optimistic, with 68% of surveyed investors expressing confidence in exit prospects over the next three years. The report highlights how PE funds are driving productivity and growth across industries, positioning themselves as catalysts for Australia's next chapter of economic resilience.
Key Findings from the Report:
- Tariffs Reshaping Portfolio Strategies: 55% of
respondents continue to pursue acquisitions but with greater
diligence on tariff impacts, while 28% are ramping up value
creation initiatives to offset rising costs caused by tariffs.
Funds are also exploring alternative supply chain strategies, such
as reshoring to mitigate risks and build resilience.
- AI Adoption on the Rise: 50% of surveyed funds
are already using AI in pre-deal diligence and post-deal value
creation, with applications ranging from due diligence to
operational efficiency initiatives. This reflects a growing trend
of integrating technology into PE playbooks to unlock value.
- Barriers to Execution: Capability gaps (82%)
and capacity constraints (69%) remain the biggest hurdles to
executing value creation plans, underscoring the need for
specialised expertise and resources.
- Value Creation as a Core Strategy: An
overwhelming 95% of respondents identified value creation as
central to their investment thesis, with 74% targeting both revenue
growth and cost reduction in tandem. Funds are increasingly
deploying advanced tools like AI to enhance operational efficiency
and drive growth.
- Navigating Tariff and Trade Volatility The
report highlights how global trade disruptions including tariffs
and ongoing global tensions, are reshaping investment strategies.
By embedding tariff and trade risks into diligence processes and
value creation plans, funds are building resilience and positioning
their portfolios for long-term success.
Value Creation No Longer Optional
"Value creation is no longer just a lever for growth; it is the foundation of private equity success in today's market" said Timo Schmid, Managing Director, Private Equity Performance Improvement. "With 95% of funds identifying value creation as central to their investment thesis, the focus has shifted to operational excellence and strategic execution to deliver sustainable returns."
Originally published 10 September 2025.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
