Private capital at a crossroads: Industry convergence

Industries are reorganising around essential human needs: how we feed and care for ourselves, move, make, and build things, and how we fuel and power it all. Spurred by disruptive megatrends such as AI and climate change, companies are leaving their familiar industrial silos and, instead, operating and collaborating in these porous cross-industry domains. This enormous and consequential shift—what we at PwC call value in motion—blurs traditional sector boundaries, opens the door to new models of value creation, and forms the basis of new investment theses. Take the construction of data centres as one example. To build out the infrastructure that supports the rollout of transformative AI systems, construction firms, investors, hyperscalers, chip manufacturers, power providers, and government agencies will have to collaborate intensely—and in entirely new ways. These developments and others like them are creating substantial opportunities for the private capital industry, which remains on a solid growth trajectory.

We forecast growth based on three scenarios: low, base, and high. In these scenarios, we expect the private capital sector to grow at a CAGR between 8% and 10% through 2030 to reach between US$25 trillion and $28 trillion in assets under management (AUM), from $16 trillion today. (See chart below.) With $3.6 trillion in dry powder, the diverse set of players—which includes private equity (PE), private credit, sovereign wealth funds, infrastructure, and other forms of principal investing—is well-positioned to act as the essential catalyst for industry transformations requiring patient or innovative capital. Sovereign funds and family offices often think in decade-long horizons. Private equity firms can commit capital with five-to-seven-year mandates. And private credit players can tailor structures to accommodate emerging asset classes. Their scale, flexibility, and long-term orientation make private investors uniquely equipped to shape the ecosystems emerging in the global economy. Firms that embrace this moment won’t just generate alpha. They’ll define the economic architecture of the next generation.

But private markets themselves are at an inflection point, grappling with structural issues, fundraising headwinds, and questions about long-term differentiation. The median holding period of PE-backed companies has been growing longer. IPO and M&A markets have yet to fully bounce back, limiting exit paths. Fundraising is more narrowly concentrated among a few firms, with larger players growing disproportionately. Regulatory scrutiny is rising, and macroeconomic volatility, interest rate uncertainty, and geopolitical risk add further complexity.

As a result, like the industries in which they invest, private capital players must reinvent their business models and approaches in order to survive and thrive in the evolving world. And cross-sector convergence may be private capital’s answer to its current constraints. Thematic investing around human needs offers scale, defensibility, and relevance—all of which are key in a market facing exit delays and rising expectations from limited partners (LPs).

Five principles for private capital success

In a world where value is shifting rapidly and industries are converging around human needs, success for private capital investors will increasingly hinge on the ability to play offense—systematically. Investors should adopt a cross-industry approach to strategy, planning from the future back through the present, and grounding it all in five practical principles.

Reframe the playing field from sectors to domains

Traditional industry boundaries are dissolving. Investors need to shift their mental models—from thinking in terms of ‘healthcare,’ ‘energy,’ or ‘mobility’ to understanding the deeper dynamics of the domains. The most exciting investment theses will emerge at the intersections of these domains. In the developing Build domain, to cite just one example, the rise of AI has turned real estate, data infrastructure, and energy generation into a single interdependent ecosystem. More broadly, private equity and real estate funds often partner with specialised operators in the senior care, behavioural health, and post-acute treatment space to share both property and service risk.

Next steps. Map the future trends of human-based needs and then understand how your portfolio must evolve and grow to capitalise on them. Identify untapped or underpenetrated value pools emerging from cross-sector convergence.

Construct platform plays

The next wave of private capital performance will come from ecosystem orchestration—not just asset selection. Leading general partners (GPs) are already shifting from isolated bets to building integrated platforms that combine capital, capabilities, and partnerships across asset classes.

In 2024, BlackRock and its infrastructure arm, Global Infrastructure Partners (GIP), together with Microsoft and other firms, launched the Global AI Infrastructure Investment Partnership—now the AI Infrastructure Partnership (AIP)—to finance AI-ready data centres and the power assets behind them. The platform targets approximately $30 billion in equity to mobilise up to $100 billion with debt. In March 2025, the partnership expanded to include tech companies NVIDIA and xAI, with energy collaborators such as GE Vernova and NextEra Energy.

Next steps. Prioritise scalable investment platforms where you can tap into synergies across infrastructure, tech, and services to create systematic advantage.

Design for resilience across future scenarios

Disruption is no longer episodic—it’s pervasive. Take energy resilience and decarbonisation. Seen as secondary considerations in the past, they’re now core strategic elements in many areas. Investors must future-proof their strategies by developing investment plays that perform not only in expected conditions, but also in scenarios of turbulence or structural transition. For example, how will a platform investing in decarbonised data centres be affected by a slowdown in renewable energy development?

Next steps. Use scenario-based forecasting and domain stress testing to calibrate capital deployment and risk-mitigation strategies. Cross-industry domains lend themselves well to such modelling because they’re shaped by long-term megatrends.

Evolve your investment model and governance

Capturing convergence opportunities often requires new capabilities: flexible capital structures, thematic fund strategies, data-driven foresight, and decision-making models that can navigate across sector and geographic boundaries. Many large investment managers are developing structures that blend private equity, credit, and infrastructure capital, giving them the ability to invest across the capital stack. Bringing together sector specialists, data scientists, and macro strategists to collaborate on investment decisions will enable investment teams to think in multiple dimensions.

Next steps. Review fund structures, allocation models, and decision rights. Consider creating cross-functional thematic teams or ‘domain squads’ that blend industry, tech, and capital expertise.

Deploy AI to create value in ecosystems

GPs are eager to move from AI blueprints to execution, but they struggle to pinpoint value-creating use cases, validate them quickly, and build the shared data foundations required to scale with confidence across their ecosystem. Progress comes when GPs treat AI as a portfolio-level capability: build once on a common data backbone, prove the technology quickly in the field, and then package the win as a reusable service across the portfolio.

Consider the example of Blackstone, which attributes approximately $200 million of bottom-line impact to portfolio AI programmes that deployed lessons learned from portfolio company Link Logistics’ asset-selection model and Signature Aviation’s demand-driven workforce planning. Both were enabled by a central data science team and shared data products.

Next steps. Adopt a structured AI pathway that starts with business value, not technology. Identify the right use cases and validate them through rapid pilots. Scale only once the shared data and architecture foundation is in place to replicate across the portfolio ecosystem.

The convergence opportunity for private capital investment

The ecosystems emerging in the domains surrounding human needs don’t just present an opportunity for private capital to make diversified bets. They’ll be targeted platforms where capital’s scale, structure, and innovation can thrive. They enable long-term investing even in choppy markets and create investment arenas that are harder to replicate and more resilient to disruption.

This approach offers another valuable attribute: the ability for private capital to align more effectively with the needs and desires of investors. As investors increasingly seek integrated value—encompassing returns, resilience, and relevance—convergence enables GPs to deliver all three. Co-investments, hybrid structures, and tokenised assets can be applied where appropriate to cross-sector opportunities.

Firms that embrace the evolving mindset, and that structure capital accordingly, will have an edge not just in deploying capital, but in competing for funds, reputation, and alignment in an increasingly competitive environment.

Base case. The most likely projection, assuming macroeconomic conditions evolve as expected. It’s derived from our econometric models and validated against industry insights, reflecting cautious but reasonable assumptions of market growth, inflation trends, and regulatory developments. Beginning in 2026, we envision a gradual global economic recovery, supported by three primary factors: (1) easing of geopolitical tensions, which restores investor confidence and stabilises economic conditions, (2) continuation of the disinflation process, which makes it more likely that the US Federal Reserve implements further rate cuts in 2026, thereby contributing to a renewed sense of optimism in the market, and (3) ongoing deregulation of the financial services industry as well as possible tax cuts in the US, factors that lower borrowing costs, help revive deal-making activity, and drive up market valuations.

High case. An optimistic—though less likely—outlook, in which favourable conditions such as stronger-than-expected economic growth, supportive regulatory changes in Europe and China, accelerated technological advancements, and increased investor confidence drive higher growth in the private markets. The impact of trade measures adopted by the US administration is less negative than expected, reducing uncertainty and creating a more stable environment. The disinflation process accelerates, allowing the Federal Reserve to cut rates more aggressively. Lower borrowing costs provide a strong tailwind for economic growth and business sentiment. A number of geopolitical tensions end in 2025, leading to greater market confidence, and fuelling deal-making activity and fundraising.

Low case. A more challenging, but still possible, economic environment, in which key risks escalate rather than ease. Trade tensions have a strong impact on the global economy, leading to a likely resurgence in inflation. With prices rising and the central banks unable to cut rates, the cost of debt remains higher for longer. Geopolitical tensions persist through 2026. Driven by renewed inflation and high interest rates, the US economy experiences a hard landing. Europe’s economy remains depressed, as EU government initiatives fail to spur growth. A more tentative recovery begins around 2027 or 2028.