The Complexity Premium: Take-Privates and Carve-Outs

Complexity is emerging as another source of premium returns, alongside specialization.

Sponsors are increasingly finding more alpha in discounted public assets than in private ones. As a result, global take-private deal value rose 43% in 2025, with North American take-privates up 72%, as GPs embraced complexity that used to be avoided.

PitchBook data tells the same story: take-private deal value across North America and Europe reached $254.6 billion in 2025, the highest annual total in its decade-long series, even as deal count (80) stayed below its 2021 peak of 98. More broadly, PE-led dealmaking grew 54% to $1.2 trillion in 2025, outpacing the broader M&A market's own 43% growth, as sponsors pursued fewer but larger transactions and average PE deal size reached a record $890 million.

Complexity comes with scale, as evidenced by the $57 billion take-private of Electronic Arts, the largest LBO ever. In 2025, 13 megadeals above $10 billion accounted for 69% of the year's entire increase in global buyout value, with 11 of them concentrated in North America.

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Meanwhile, a rotation called the HALO trade is emerging within that broader take-private market.

The "HALO" trade (Heavy Assets, Low Obsolescence, a term popularized in early 2026) held a steady 10%–15% share of PE deal count over the past decade. It then surged to 31.2% of all PE capital deployed in the first quarter of 2026 alone.

The quarter's largest transaction (the $33.4 billion take-private of AES Corporation, a global power utility with more than 32 gigawatts of generation capacity across 15 countries) is a clear example of HALO: asset-heavy and not exposed to AI-disruption risk. It was led by EQT and Global Infrastructure Partners, with the Qatar Investment Authority and CalPERS co-investing alongside them.

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The same logic is drawing GPs toward carve-outs, where operational complexity often creates more room for value creation than a straightforward buyout.

The trend isn't confined to the US. European corporate carve-outs exceeded €85 billion in 2025, as multinationals streamline portfolios and reduce complexity, reinforcing carve-outs as a genuinely global source of GP opportunity.

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