Independent Sponsors Seen as Material Buyers for Single-Deal Private Companies

Fresh data show that fundraising continues to trend downward. According to Pitchbook’s latest Global Private Market report, private-equity capital fundraises hit a seven-year low of $414 billion in 2025. In fact, PE funds accounted for just one-third of all private-capital raised, the report showed, compared with 41 percent in 2024.

We know the story. Liquidity issues from a slowdown in exits, uncertainty about the economy and geopolitics and longer-than-normal hold periods have combined to make it less attractive for some LPs to participate at lower levels or even at all in the traditional fundraises. Maybe a little fatigue has set in as well.

But as we know, the PE world is an innovative place, and green shoots, even though small, appear to keep the deal-market flow alive.

Enter independent sponsors. This cohort — simply put — are deal-by-deal sponsors (versus overall fund managers) without committed blind-pools of capital.

Some believe independent sponsors are becoming actual material buyers of private companies and not just a group playing along the edges. In fact, observers estimate there are anywhere between 1,200 to 1,600 active independent sponsors in the US market now with as many as 1,500 involved in recent deal activity. No hard data exist at this point to verify numbers.

But Axial, a private deal network, reports that independent sponsors accounted for 27% of closed deals on its platform over the last 12 months (vs. 20% for PE funds).

So why the growth? A few key factors seem to be at play: a rise of private wealth in PE (especially family offices and high-net-worth individuals), a desire for more direct exposure to private companies (proprietary attraction), plus the search for lower fixed costs.

For those reasons, a lot of independent sponsors can be found in the lower and lower-middle PE market, where deal sizes tend to be smaller and where founders of the companies may be more flexible in terms, governance, and check sizes while investors do not have to fit into a specific fund mandate or portfolio-concentration limits.

By definition, these types of sponsors tend to be more entrepreneurial, and more market facing to build relationships with capital providers and specialists. Don’t call them “small PE,” think of them as sole or small-team operators that are lean. Or to take it a step further, pure deal junkies. The focus is on the deal, one deal at a time.

But the opportunity is not without hurdles. Leaner teams mean operational constraints. Check sizes mean control rights, governance and fees are more difficult than single-fund structures. Bespoke – which can equal time — is the byword here when dealing with a family office, HNW individual and a PE co-invest on one single transaction.

What does this all really mean from a 33,000-foot level? Now more than ever, we are witnessing a segregated market with large established funds winning, the middle squeezed and the independent sponsor a bridge in the lower-middle between the dealmaker and the investor, a position that no doubt will grow in stature in the months and years ahead.

Mark Kollar
Partner, Prosek Partners

Mark Kollar’s monthly Letter from America can be read at The Alternative Investor.