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| The Daily Pitch |
| PE, VC and M&A |
| Your edge on global private capital markets |
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| Good morning. Today's Daily Pitch covers the EMEA region's march to maturity, Europe's continental dip in PE take-privates and emerging markets' role in the gaming industry's next level. |
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| Policy clarity, Boeing recovery propel aerospace, defense PE deals |
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By Jim Corridore, Senior Industrials Research Analyst
PE dealmaking in aerospace and defense rebounded sharply in Q3 as tariff chaos eased, investors considered the promise of a bulging defense budget and positive news from Boeing cheered the industry.
The vertical recorded 87 PE deals, a 78% increase from Q2's 49 and slightly more than the 84 deals seen a year earlier, according to our Q3 2025 Aerospace & Defense Report. Disclosed deal value also rose to $6.5 billion from $4.5 billion in Q2. |
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The proposed fiscal 2026 US defense budget is expected to exceed $1 trillion in total funding and is heavily oriented toward next-generation aircraft, missile defense, hypersonics and space, pointing PE investors in these directions.
At the same time, the tariff program has evolved toward reciprocal agreements with key partners, which helps PE firms better assess long term supply chain and input cost risks, despite ongoing legal challenges.
And Boeing's expectations for a gradual normalization of its 737 Max production following a nod from the Federal Aviation Administration, combined with healthy backlogs at both Boeing and Airbus, points to a more predictable demand outlook for the sector's supply chain.
Deal activity is increasingly concentrated in scalable, fragmented subsectors where investors can lean on consolidation and operational improvements.
Parts and services that support an aging global fleet are particular hotspots, as airlines keep aircraft in service longer due to persistent delivery constraints. Parts fall under the umbrella of commercial aerospace, which saw 96 deals in the first nine months of 2025, already exceeding its nine-year average.
Airline-related opportunities also remain attractive, especially in ground handling, flight software and maintenance, which is less exposed to tariffs.
With dry powder high and consolidation increasing across parts, software and services, investors appear poised to stay active in aerospace and defense as macro visibility improves heading into 2026. |
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| A message from CarboCode S.A. |
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| Portuguese biotech enters U.S./EU race for $50B infant formula market |
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Only 40% of babies are breastfed — leaving most formulas nearly devoid of gangliosides, complex lipids essential for brain, gut, and immune development. Their absence is linked to cognitive decline and neurodegenerative diseases such as Parkinson’s.
CarboCode, a Portuguese biotech, has built a platform that enables industrial production of human-identical gangliosides — reaching 100 tons annually by 2029. Backed by €60M in funding, the company will soon submit U.S. and EU regulatory filings and is in talks with major nutrition multinationals.
Led by the team behind the HMO technology acquired by DSM for $826M (now in Nestlé formulas), CarboCode aims to deliver the next leap in infant nutrition and use the power of these compounds for adult nutrition — and a future link to neurodegenerative therapy.
Learn more |
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• Emerging markets—home to over 85% of the world's population—could drive the majority of gaming revenue by 2030, according to our latest analyst note. What's fueling the sector's next chapter?
• Secondary investors are shifting their attention away from the largest continuation fund opportunities and turning to middle-market deals, new research from Lazard shows. Read more
• The share of capital awarded by VCs' anchor investors has risen nearly five percentage points in the last few vintages, according to new Carta data. Find out more
• PE take-privates in Europe have fallen to a five-year low, as stock rallies have limited firms to completing just 37 such deals this year worth a total of €24.9 billion (about $29.1 billion). Read more |
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| How EMEA private capital will change in 2026 |
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By Nalin Patel, Director of EMEA Private Capital Research
Europe and the neighboring MENA region are entering a new phase of private markets maturity—defined by a record shift toward private ownership, a surge in AI and the emergence of new regional hubs, according to our 2026 EMEA Private Capital Outlook.
First, PE's footprint in Europe is expected to expand further. Our analysts anticipate the ratio of PE-backed companies to public companies in Europe to hit a new high of 2.3x by the end of 2026, up from 2.1x in 2025.
This reflects a decade-long divergence: the number of PE-backed companies has doubled to roughly 13,800 since 2014, while the listed universe has stagnated. |
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Second, US investors are tightening their grip on European dealmaking. After a strong shift of capital into Europe driven by lower interest rates, US participant share is expected to reach 25% of European PE deal count. In the UK, Europe's largest PE market, one in three deals already involves a US sponsor.
Public markets are not out of the picture. Our IPO window framework suggests Europe's listing environment will remain open in 2026—but with an emphasis on quality over quantity. Profitable IPOs have continued to increase their share of listings since 2022, now accounting for nearly 90% YTD versus 66.4% in 2024.
On the venture side, AI is likely to continue its dominance. The sector is expected to account for more than half of European VC deal value in 2026, up from 37.9% YTD in 2025, as Europe follows the US playbook.
Lower median deal sizes and valuations compared to the US suggest scope for catch-up—and potential upside—for investors willing to price risk in a frothy yet still maturing ecosystem.
Finally, capital is becoming more geographically diverse. Stockholm is poised to challenge London, Paris and Berlin as a European hub, powered by landmark exits such as Klarna and a growing cohort of fast-scaling AI and SaaS companies.
In the Middle East and North Africa, Saudi Arabia is emerging as a private markets heavyweight, with VC deal counts rivaling those of the UAE and the sovereign Public Investment Fund anchoring some of the region's largest PE transactions.
For investors, 2026 may bring more competition and wider choices across the EMEA private capital landscape. |
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Smart reads that caught our eye.
• Bankers call on PE firms to keep IPOs going in 2026. This year's IPO bounce back could be the start of a true recovery, but portfolio companies n | | | | | | | |
