Key Takeaways
- • Private equity and venture capital investment in fintech totaled $18.54 billion in 2025, up 44% year over year, according to S&P Global Market Intelligence data, even as deal count fell about 34% to 240 deals from 365 in 2024.
- • Private equity and venture capital firms have reduced new investment in application software, which declined in volume for a third consecutive year in 2025, as AI-driven automation fears weighed on the sector.
- • Alternative asset managers faced repeated analyst questions on Q4 2025 earnings calls about software exposure spanning buyouts, venture stakes and private credit loans; Blackstone CFO Michael Chae said some investments may be at risk while larger, well-entrenched businesses may benefit from AI.
- • Fundraising remained active, with Vision Ridge Partners raising about $2.4 billion for Sustainable Asset Fund IV and Montana Capital Partners closing MCP Opportunity Secondary Program VI at $1.4 billion.
- • Central European private equity investors are more optimistic for 2026, with 56% expecting higher deal activity versus 28% in the July 2025 Deloitte survey.
Summary
As publicly traded alternative asset managers reported fourth-quarter 2025 earnings in January and February, exposure to a software sector under threat from artificial intelligence emerged as a recurring topic, according to S&P Global Market Intelligence. Private equity and venture capital firms have pulled back from application software, where deal volume declined for a third straight year in 2025. The retreat coincided with growing recognition across public and private markets that AI-powered automation could erode demand for some software products, a concern that culminated in an early February sell-off in technology stocks.
Analysts pressed executives on earnings calls about software exposure, which extends beyond private equity portfolio companies to venture capital holdings and loans to software firms through private credit funds. Blackstone CFO Michael Chae acknowledged that some investments may be at risk but said others are positioned to accelerate. "We expect larger, well-entrenched businesses to be better protected and, in many cases, beneficiaries of AI given the attractive moats and resources to invest in their own businesses and apply AI as a competitive advantage," Chae said.
In fintech, private equity and venture capital investment reached $18.54 billion in 2025, up 44% year over year, per Market Intelligence data. Deal volume fell about 34% to 240 transactions from 365 in 2024, indicating that the increase was driven by larger deals. S&P Global attributes part of the higher average deal size to premium valuations assigned to fintech companies seen as successfully integrating AI.
Fundraising and deal activity continued across strategies. Vision Ridge Partners raised about $2.4 billion for Sustainable Asset Fund IV, targeting energy, transportation and agriculture. Montana Capital Partners reached a $1.4 billion final close for MCP Opportunity Secondary Program VI, which has deployed over 50% of its capital. Union Capital Associates closed Union Capital Equity Partners IV at its $450 million hard cap four months after launch. On the transaction side, EQT Infrastructure VI and Blackstone's infrastructure unit agreed to acquire Urbaser SA from Platinum Equity in a deal valued at about $6.6 billion, and CVC Capital Partners agreed to buy DSM-Firmenich's animal nutrition and health business at an enterprise value of about \u20ac2.2 billion.
In Central Europe, a December 2025 Deloitte survey found 56% of private equity respondents expect deal activity to increase in 2026, up from 28% in July 2025, while 8% expect declines, down from 11%. About 51% expect debt availability to grow, up from 41%.
Analysts pressed executives on earnings calls about software exposure, which extends beyond private equity portfolio companies to venture capital holdings and loans to software firms through private credit funds. Blackstone CFO Michael Chae acknowledged that some investments may be at risk but said others are positioned to accelerate. "We expect larger, well-entrenched businesses to be better protected and, in many cases, beneficiaries of AI given the attractive moats and resources to invest in their own businesses and apply AI as a competitive advantage," Chae said.
In fintech, private equity and venture capital investment reached $18.54 billion in 2025, up 44% year over year, per Market Intelligence data. Deal volume fell about 34% to 240 transactions from 365 in 2024, indicating that the increase was driven by larger deals. S&P Global attributes part of the higher average deal size to premium valuations assigned to fintech companies seen as successfully integrating AI.
Fundraising and deal activity continued across strategies. Vision Ridge Partners raised about $2.4 billion for Sustainable Asset Fund IV, targeting energy, transportation and agriculture. Montana Capital Partners reached a $1.4 billion final close for MCP Opportunity Secondary Program VI, which has deployed over 50% of its capital. Union Capital Associates closed Union Capital Equity Partners IV at its $450 million hard cap four months after launch. On the transaction side, EQT Infrastructure VI and Blackstone's infrastructure unit agreed to acquire Urbaser SA from Platinum Equity in a deal valued at about $6.6 billion, and CVC Capital Partners agreed to buy DSM-Firmenich's animal nutrition and health business at an enterprise value of about \u20ac2.2 billion.
In Central Europe, a December 2025 Deloitte survey found 56% of private equity respondents expect deal activity to increase in 2026, up from 28% in July 2025, while 8% expect declines, down from 11%. About 51% expect debt availability to grow, up from 41%.
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