Private equity firms are sharpening their sector strategies amid a complex dealmaking environment shaped by macro uncertainties, evolving tech landscapes, and a heightened focus on operational efficiency. As market conditions shift, so too does the allocation of capital, toward industries with more scalable growth.
Insights from our long-term data analysis project 25 Years of Private Equity Trends by Industry reveal how PE firms are optimizing platform strategies. The data shows where capital is being concentrated, and where it's being pulled back, offering a clearer view of the sectors shaping tomorrow's investment themes.
This shift in deal activity reflects a broader PE realignment of capturing high-conviction, sector-specific opportunities for dealmakers seeking stronger returns and a strategic edge.
Looking at the 10 largest sectors by private equity deal volume, here’s a breakdown of the industries that are becoming hotbeds of PE activity, and those that may be signaling caution. Below the chart, you'll find detailed reports on each industry.
Fastest Growing Sectors
Data Processing, Hosting, and Related Services (+164%)
Digital infrastructure continues to be a cornerstone of value creation. From enterprise cloud adoption to cybersecurity and SaaS enablement, this sector's explosive growth reflects the increasing demand for scalable, tech-driven platforms. PE firms are doubling down on recurring revenue models, robust digital architecture, and data-centric solutions that can serve multiple verticals.
Publishing Industries (except Internet) (+71%)
Surprisingly, traditional publishing is making a comeback, but with a twist. Investors are targeting specialized content providers, trade publications, and B2B knowledge platforms with loyal audiences and monetizable IP. This suggests a shift from broad-based media toward focused, defensible niches.
Professional, Scientific, and Technical Services (+56%)
This diverse sector includes IT consulting, engineering services, and technical research. Its appeal lies in asset-light models, high-margin advisory services, and the critical role these firms play in digital transformation and infrastructure resilience. Many deals in this space are roll-ups, creating scaled service platforms.
Ambulatory Health Care Services (+55%)
The shift toward consumer-centric healthcare is accelerating. Investors are bullish at outpatient clinics, urgent care centers, and telehealth providers. These businesses are often founder-led, locally scaled, and ripe for geographic or vertical expansion through buy-and-build strategies.
Administrative and Support Services (+17%)
As companies across industries seek flexible labor and operational efficiency, demand for third-party service providers has risen steadily. For private equity, these businesses offer predictable revenue streams, scalable operating models, and compelling roll-up potential across a fragmented landscape.
Support Activities for Transportation (+6%)
Encompassing freight logistics, marine cargo handling, and infrastructure support services, this sector is quietly gaining traction. As global trade rebounds and supply chain networks evolve, PE firms are targeting specialized logistics providers and transportation services that can scale with demand. The recurring, infrastructure-adjacent nature of these businesses offers long-term value creation through operational optimization and geographic expansion.
Fastest Declining Sectors
Merchant Wholesalers, Nondurable Goods (-49%)
Supply chain disruptions, inflationary cost structures, and margin compression are dampening enthusiasm in this segment. PE firms appear to be redirecting capital toward more tech-enabled distribution models or vertically integrated supply chains.
Machinery Manufacturing (-18%)
High capex intensity, labor shortages, and rising input costs have slowed momentum. While still strategic for long-term industrial portfolios, investors are approaching this space with greater caution and selectivity.
Securities, Commodity Contracts, and Other Financial Investments (-14%)
Despite historically being a magnet for institutional capital, this sector has experienced a noticeable drop-in deal activity. The decline may reflect caution around interest rate impacts, volatility in public markets, and tightening compliance environments affecting financial intermediaries.
Chemical Manufacturing (-13%)
Long a favorite for operational improvements and margin optimization, this sector is facing challenges from regulatory pressures and commodity price volatility. Deals may require more sophisticated value-creation plans to justify investment.
