In early June, more than five thousand private equity professionals and investors gathered in Berlin for the annual SuperReturn conference. As regular attendees, we’ve witnessed the event grow year after year with more investors and operators joining the conversation each time.

This year, the general tone at the conference was one of deliberate action. Managers appear to be placing even greater emphasis on operational depth to generate value, while exercising a higher degree of selectivity in their capital deployment. Below are our main observations, drawn from discussions with numerous conference participants and panelists.

Dealmaking outlook

There was a general consensus among participants that (the risk of) tariffs have disrupted dealmaking. This has partly reversed the progress made in closing the pricing gap between buyers and sellers over the past two years. While sellers continue to hold on to higher valuations, citing the recent rebound in public equities as a signal of market strength, buyers remain cautious due to the uncertain nature of ongoing trade talks.

However, once greater clarity emerges around these issues, deal activity is expected to pick up, likely towards the end of the year.

Dry powder

Moonfare signature caps — always popular among conferencegoers — have been dedicated this year to one of PE’s key challenges: dry powder deployment. Due to the well-known combination of elevated interest rates and market volatility, uncommitted capital — largely raised during the 2020-2022 boom¹ — remains near record levels and continues to age.²

We’ve seen that this is a result of cautious dealmaking, as well as the fact that GPs are holding on to capital to support existing portfolio companies going through a more challenging macro environment.

Areas of focus

Venture capital remains optimistic about AI,³ particularly in the areas of large language models and in the application layer. There is a growing sense that 2025 marks the first vintage where AI is being widely deployed. Secondaries continue to be a key focus, with both LPs and GPs seeking opportunities to improve liquidity.⁴

The mid-market space is also gaining attention, as it’s perceived as more insulated from the impact of tariffs.⁵ Many mid-sized companies have more local consumer bases and supply chains, which may position them well as international trade becomes more costly.

Finally, open-ended or evergreen funds, in both equity and credit, are on the rise as GPs look to private wealth as a new and increasingly important source of capital.⁶

Private equity playbook

Another takeaway from the conference is that PE managers are pivoting. Funds are ramping up their due diligence efforts to assess how companies are positioned to cope with the new economic reality characterised by higher tariff-related costs, elevated interest rates and an uncertain outlook. Asset-light, service-driven businesses that can potentially thrive in tougher environments are becoming prime targets for many in the industry. There also seems to be less emphasis on M&A or leverage as value creation strategies, and more focus on core value creation and operational depth to drive returns.

Europe in the spotlight

Finally, PE leaders shared a growing sense of optimism about Europe.⁷ Falling interest rates in the EU and more political stability are helping drive this shift. Several private equity firms are expanding their presence in the region. That said, the US market remains a key market for most allocators, not least due to its size and capital influence.