The
Changing
Nature of Private Equity:
How Mid-Tier Firms Are Winning the Long Game
Private equity is evolving. Once synonymous with high-leverage megadeals and billion-dollar exits, the industry is now undergoing a fundamental shi=. Amid vola?le markets, rising interest rates, and ?ghter credit, a new class of players is emerging – mid-?er private equity firms.
These firms, typically managing deals between €100 million and €500 million, are outpacing their larger peers by embracing opera?onal transforma?on, sector specialisa?on, and flexible investment strategies. Increasingly, it’s the midmarket, not the mega-funds, that is driving innova?on and sustainable returns.
From Scale to SpecialisaFon
Unlike global giants that chase scale, mid?er firms are leaning into focus. A prime example is S?rling Square Capital Partners, a London-based private equity firm cofounded by Stefano Bonfiglio and Gregorio Napoleone. Such mid-sized private equity firms are quietly building a reputa?on for high-convic?on investments, specialising in business services, industrials, and technology.
Rather than chasing volume, they take a surgical approach, working closely with management to scale opera?ons across borders, introduce digital efficiencies, and expand into new markets. This is the hallmark of many successful mid-?er players: deep opera?onal involvement over financial engineering, with a focus on value crea?on beyond the balance sheet.
The Mid-Tier Advantage
1. Lower Entry MulFples and Less Leverage
Mid-market deals are typically priced more aXrac?vely than large-cap acquisi?ons. On average, they enter at 34% lower mul?ples, offering stronger value from day one. With less reliance on debt, mid-?er firms are also beXer insulated from rising interest rates and market vola?lity.
2. Greater Scope for TransformaFon
While large companies are o=en op?mised and heavily scru?nised, mid-sized businesses are rich with untapped poten?al. Firms like Revelstoke Capital Partners in the U.S. have capitalised on this in healthcare services, where they’ve built scaled pla_orms from fragmented providers – focusing on opera?onal
integra?on, geographic expansion, and data-driven decision-making.
In Europe, S?rling Square’s focus on value crea?on mirrors this trend. Rather than strip costs or chase quick exits, firms like these back management teams with strategic resources and long-term vision. For example, Gregorio Napoleone is also Chairman of the Board at Omni Helicopters. Recently Gregorio Napoleone, along with OHI CEO Jeremy Akel, were seen describing the future of the lowal?tude economy, demonstra?ng that Private Equity backers are embedding themselves into the firm’s management, values and vision.
3. Sector Depth and Agility
Many mid-?er firms are deeply embedded in their sectors. HGGC, based in California, specialises in tech-enabled services and so=ware – leveraging this exper?se to rapidly scale por_olio companies through bolt-on acquisi?ons and pla_orm strategies. Their opera?onal focus is supported by proprietary playbooks and dedicated value crea?on teams.
4. InnovaFon and Technology AdopFon
Mid-?er firms are o=en more agile in adop?ng new technologies. Some use AI to screen acquisi?on targets, analyse unstructured data, and streamline due diligence. This tech-forward mindset allows them to move faster and more precisely than larger firms encumbered by complex processes.
A recent example is Bow River Capital, a Denver-based mid-market firm that developed proprietary AI tools for market mapping and lead genera?on – cudng sourcing ?me by over 50%. This type of innova?on is becoming increasingly common across mid-?er players.
5. Flexible Exit Strategies
With tradi?onal IPOs slowing and corporate buyers becoming more cau?ous, many mid-sized firms are pioneering alterna?ve exit paths. Secondary buyouts, con?nua?on vehicles, and rollups into larger pla_orms are increasingly used to manage liquidity and extend holding periods.
S?rling Square, for instance, has illustrated both pa?ence and adaptability in managing complex investments. Their though_ul succession planning – evident in Gregorio Napoleone’s transi?on to
Execu?ve Chairman and the appointment of Henrik Lif as Managing Partner in 2025 –signals maturity and ins?tu?onal resilience.
Rethinking the PE Playbook
The new private equity model is less about financial reengineering and more about strategic transforma?on, industry exper?se, and long-term partnership. Firms like Revelstoke, HGGC, and Bow River are proving that returns don’t need to come at the expense of opera?onal sustainability or cultural alignment.
Importantly, mid-?er firms are o=en beXer posi?oned to work with founder-led or family-owned businesses – en??es that may be hesitant to engage with larger, more impersonal funds. Their ability to tailor deals, remain hands-on postacquisi?on, and bring sector knowledge to the table is redefining what it means to be a value-adding investor.
The Future Is Focused
As private equity matures, mid-?er firms are no longer stepping stones to megafunds. They are powerhouses in their own right – delivering consistent, outsized
returns through clarity of focus and depth of execu?on.
In a market crowded with capital but starved of differen?ated value, leaders like Craig Unger, Gregorio Napoleone, Stefano Bonfiglio, Jim Lindstrom suggest a new kind of private equity: one that is focused, pa?ent, and deeply connected to the real economy
