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| (Mara Potter/PitchBook News) |
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Deal-hungry private credit managers have shown a rising appetite for offering preferred equity investments in young energy companies as they are eager to put capital to work.
Large private credit managers have stepped up as active providers of this quasi-equity financing in recent quarters, according to market sources, backing deals worth several hundred million dollars each—a sharp increase from the typical sub-$100 million transactions of the past. These deals typically feature more stringent protections that mirror the terms seen in loan agreements.
The recent uptick in debt-like preferred equity deals signals a willingness by private credit funds to stretch their risk tolerance amid pressure to strike new deals.
"They are chomping at the bit to do these deals in any way they can," said Angela Hagerman, a debt finance partner at Reed Smith in the energy sector. "They are not going to do a bad deal, but they will take a look at just about anything."
I'm Madeline Shi, and this is The Weekend Pitch. You can reach me at madeline.shi@pitchbook.com or on X @Madelin94615831. |
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| A message from Fidelity Private Shares |
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Despite a decline in overall VC dealmaking in Europe, the region's healthtech market is still attracting strong investor interest—with funding on track to record the third highest annual tally this decade. How much capital has flowed into European healthtech so far this year?
A) €5.9 billion
B) €3.1 billion
C) €1.5 billion
D) €4 billion
Find your answer at the bottom of The Weekend Pitch! |
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VC funding for carbon tech
sector fades in Q2
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Startups in the carbon and emissions tech industry collected $2 billion in VC funding in Q2—representing a decline of 44% quarter-over-quarter, according to our latest report on the sector.
The drop was driven by a lack of mega-deals and a steep decline in funding for the carbon tech segment. But median deal sizes overall continued their long-term climb, and policy shifts under the Big Beautiful Bill Act are poised to reshape incentives for carbon capture technologies. |
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M&A is on pace for a record year in deal count. Despite ongoing market uncertainty, the broader M&A landscape remained robust in Q2, marking the third consecutive quarter for deal value to hit about $1 trillion across roughly 12,000 transactions.
This strength reflects the growing number of firms scaling up through acquisitions to navigate a new range of risks and opportunities, according to our Q2 2025 Global M&A Report. |
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| (Mara Potter/PitchBook News) |
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"LPs haven't expected returns by a Fund II, but because their money is tied up in venture right now, they're looking for liquidity. The problem with the asset class is there haven't been strong returns—never mind from emerging managers, but from everyone."
—Amy Francetic, founder and managing GP at Buoyant Ventures, speaking to PitchBook's Jacob Robbins on the challenging environment first-time VC managers are facing trying to raise a second fund. Of those that raised during the record year of 2021, only a third have been able to secure a second vehicle. |
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Keep an eye out for these insights and research reports coming out this week:
- Q2 2025 Crypto Report
- Q2 2025 Industrials: Aerospace & Defense Report
- Q2 2025 European VC Valuations Report
- Analyst Note: Capital in European Football Part III
- Analyst Note: Peak to Pivot: Sponsor Equity Eases as Lenders Loosen Up
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