Data from PitchBook reveals that 137 deals and 34 exits were completed, and €1.8 billion of capital invested by 160 private equity investors in Ireland during 2025. Private equity houses have also played a key role in funding the consolidation of a number of sectors including insurance brokerages, accountancy practices, pharmacies, and veterinary practices.
1. What kinds of Irish businesses and sectors are currently most attractive to private equity investors?
Private equity investors can invest across a broad range of sectors, with individual funds often having different preferences regarding sector, investment size and stage of development. Rather than focusing solely on a particular sector, investors are generally looking for scalable businesses with strong market positions and a clear opportunity to accelerate growth, whether organically or through acquisitions. Investors continue to be attracted to Irish businesses that demonstrate strong market positions, recurring revenues, scalable operating models and opportunities for growth, whether organically or through acquisition.
The characteristics of the business are therefore often as important as the sector in which it operates. Investors will typically assess the size and growth potential of the market, the company’s ability to take advantage of that growth, the strength of the management team, and whether the business has the people, processes, systems and supply chain needed to support expansion.
Other important considerations include the company’s growth rate, margins, cash conversion and risk profile. Ultimately, private equity investors are backing both a business plan and a management team, so the quality of management, the credibility of the growth strategy and the cultural fit between the parties are crucial.
2. What level of return are private equity investors typically looking for, and how do those expectations influence the way a deal is structured?
Private equity investors are looking for businesses that can deliver a substantial return within a relatively defined investment period. A commonly referenced rule of thumb is that investors seek to double their investment over approximately three years or treble it over approximately five years.
These return expectations have a direct influence on the valuation, funding structure, management incentives and future exit strategy agreed at the outset. Private equity transactions can take many different forms, including majority investments, minority investments, buyouts and development capital. Each deal will have its own combination of equity, debt, performance targets and incentive arrangements.
The deal will normally establish a benchmark return for the investor. Management may then be given the opportunity to participate in the additional equity value created above that benchmark. This can provide a meaningful financial incentive for management, while aligning the interests of the investor, management team and company around the same growth plan.
Value creation will typically be driven by growing earnings, maximising cash conversion and identifying and mitigating potential risks. Investors will therefore expect the business to have a clear and credible “equity story” explaining how the investment will accelerate growth, how the strategy will be delivered and how value will ultimately be realised at exit.
3. How much control or influence will a private equity investor normally seek over the running of a business, and what should founders or existing owners understand about governance and decision-making before agreeing a deal?
The level of control will depend primarily on the type of transaction and whether the investor is acquiring a majority or minority interest. However, even where a private equity investor does not control the day-to-day running of the business, it will normally expect meaningful involvement in governance, strategy, financial oversight and major decisions.
Founders and existing owners should clearly understand the proposed governance arrangements, the investor’s approval rights, the level of reporting required and the decisions that will be reserved for the board or shareholders. They should also understand the investor’s anticipated holding period, the fund’s stage in its own investment cycle and the likely route to a future exit.
The relationship works best where there is strong alignment from the outset. Owners should have clarity on their personal and business objectives, what success looks like, their non-negotiables and the role they wish to play following the investment. They should assess whether the investor has relevant sector expertise, shares their vision for the business and has a compatible approach to working with management. Speaking with current and former portfolio companies can be a valuable part of that assessment.
Private equity should be viewed as an active partnership rather than simply a source of capital. If performance falls materially behind the agreed plan, the investor may become more involved in the running of the company and could seek changes to the strategy or management team. It is therefore important that the business plan is realistic, the governance arrangements are fully understood and the interests of all stakeholders remain aligned throughout the investment period.
4. What are the main advantages and disadvantages for an Irish business considering private equity investment?
The principal advantage is that private equity can provide both the capital and expertise needed to accelerate a company’s development. It can support organic growth, acquisitions, international expansion and investment in the people, systems and infrastructure required to build a scalable business. It can also create employment, professionalise the organisation and build value for management and shareholders.
Private equity can be relevant both to business owners considering succession or a partial or full exit, and to management teams seeking capital to grow the company more quickly. The investor may also bring strategic input, governance experience, sector knowledge and access to a broader network. Management can frequently retain or obtain an equity interest, giving the team the opportunity to participate in the future value created.
However, the process can be complex, intricate and demanding, particularly for a business undertaking a private equity transaction for the first time. Significant preparation and due diligence will be required, including a clear strategy, detailed business plan, robust financial forecasts and an organisation structure capable of delivering the proposed growth. Management must also be prepared for more formal reporting, increased scrutiny and greater accountability against the agreed plan.
Owners must also be comfortable sharing ownership and influence, and with the fact that the investor will ultimately seek an exit. Misalignment over strategy, culture, risk appetite, management roles or the timing of an exit can create tension. For that reason, choosing the right partner and agreeing the right terms are at least as important as securing the highest headline valuation.
5. Conclusion
For any Irish business considering private equity, the starting point should be clarity. Owners and management need to define what success means for them, understand how much investment is required, consider the available alternatives and identify their non-negotiables before approaching potential investors.
Preparation is equally important. A compelling equity story should clearly explain the market opportunity, the strategy for accelerating growth, the capabilities of the management team and the operational investment required to deliver the plan. It should also consider the likely exit routes from the outset, whether through a trade sale, a sale to another private equity investor or another form of transaction.
Ultimately, private equity is not simply about securing funding. It is about finding a partner with the right capital, experience, cultural fit and shared vision for the business. The most successful investments are those where management and investors remain aligned around the equity story and work together to deliver sustainable growth and realise value at exit.
Content published in The Irish Times Corporate Finance Special Report.
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