USA – MARYLAND Trends and Developments Contributed by: Michael Hardy, Joseph Machi, Nicholas Stewart and Leen Al-Alami, Duane Morris LLP
in OpenAI. Nonetheless, minority-stake transactions are expected to continue to be leveraged by funds as an alternative investment option. One example of an industry where this has been true in the last year is sports, where a number of major private equity funds have been approved to acquire minority stakes in pro - fessional sports teams. Minority-stake transactions are also expected to grow as a corollary of the “retail fund” trend. As many large private equity funds have begun offering funds that are accessible to wealthy investors and family offices through lower minimums and more flexible investment structures, minority-stake transactions offer an invest - ment option to retail funds that is more “low touch” but has upside potential for smaller investors. Add-ons Add-ons, bolt-ons and tuck-ins became more attrac - tive in the period after the COVID-19 pandemic. Mar - ket analysts estimated that, in 2024, such transactions accounted for anywhere between 45% and 75% of
all private equity deals, depending on industry and segment of deal value. This year, however, especially due to uncertainty relating to tariffs, it is expected that private equity firms will shift their attention away from bolt-ons and focus instead on helping their portfo - lio companies weather operational and supply chain challenges caused by the geopolitical landscape. It is reported that between December 2024 and March 2025, the number of private equity firms considering bolt-on deals fell from 40% to 30%, driven largely by tariffs and the high cost of capital. By contrast, by the end of Q1 2025, 87% of private equity firms (up from only 17% in Q4 2024) reported focusing their efforts on working with management teams to address oper - ational issues, both in the medium and long term. With the transactional landscape riddled with vari - ables and uncertainty, it remains to be seen whether these outlooks will prove true by the end of the year. What is certain, however, is that private equity funds will continue to play a key role in M&A activity and the general economy.
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