Given the tumult across multiple markets and sectors in 2025, which do you think are the most underappreciated trends from a technological standpoint for PE firms and the broader PE ecosystem to track more closely?

Ryan Paskin: The “automated FP&A analyst” is here. Plug an AI layer into a clean, consolidated data warehouse and let it behave like a hyper-responsive analyst who never sleeps. Instead of waiting a week for variance analysis, you prompt “Show EBITDA by BU versus budget for the last three months and flag anomalies.” You get a chart, commentary, and a hypothesis – no manual pulls, no pivot tables.

Margaret Shanley: The teams most prepared for a transaction already run the business on a tight set of key performance indicators and have fit-for-purpose enterprise resource planning to automate core processes. That discipline shortens close cycles and produces timely, defensible metrics. As AI tools layer in, the real differentiator is data quality and system integration – turning AI outputs into decisions on demand.

Jon Schwartz: AI implementation is only as good as the data and stack underneath it. Industry-specific ERP and accurate, well-governed data are critical to realizing return on investment (ROI). Also keep an eye on evolving AI regulation – multinational portfolios will need to meet U.S. and global requirements.

Which client concerns from the past year proved most instructive as you worked through them, and why?

Paskin: A common client concern is, “We can’t trust the numbers.” Founder-led platforms with $50-plus million in revenue running QuickBooks and handwritten accounts payable (AP) logs were common. Before modeling synergies, we standardized chart of accounts, cleaned the general ledger and normalized data. Lesson: Data integrity is the foundation – every value lever sits on it.

Shanley: Every deal is predicated on a valuation – often a multiple of earnings – and a target level of net working capital to be left in the business. With lean finance teams and uneven systems, we focus on removing surprise risk and documenting the economics clearly so sponsors do not inherit avoidable issues post-close.

Schwartz: The valuation gap between buyers and sellers widened, and diligence streams deepened. Processes slowed – partly due to the HSR form overhaul that front-loads more information in filings as of Feb. 10, 2025 – which PE teams should factor into timelines.

Liquidity pressures are still significant, but exit rates are easing concerns to some degree – what are the most successful tactics you saw deployed for value creation by PE firms in 2025 to help get portfolio companies to the finish line for a successful exit?

Paskin: Real integration in buy-and-builds, not “three logos under a holdco.” The winners standardized systems, harmonized processes, and built one culture. That is what buyers pay for – one platform with repeatable performance. Half-baked roll-ups trade at a discount; integrated platforms earn multiple expansions.

Shanley: Measure contribution margin at customer/SKU/ channel – and act on the insights. Companies that measure marketing ROI in real time pivot faster, raise prices with precision, and align sales toward profitable growth. Those microeconomics add up to bigger exit stories.

Schwartz: Sponsors captured tariff and freight leakage, fixed labor and fulfillment inefficiencies, and used data to reduce deductions and chargebacks. Some buyers prefer to take that work on post-close for outsized returns; others pay up for a cleaner base – either way, those moves lift valuation.

Conversely, what about lessons learned from PE backers and their portfolio companies that had to execute pivots, cut costs, or the like?

Paskin: Make hard calls early. Early action buys options – late action forces survival mode. Teams that moved before lenders pressed the issue kept control of the plan.

Schwartz: Simplify and modernize the tech stack early to speed close and reduce risk. And remember: Pricing power often beats deep operating expense cuts. Where reductions were unavoidable, pairing them with automation produced durable savings.

Shanley: Invest in the bench across finance, sales, and ops – and manage to KPIs. Founders focused only on top-line growth miss that people and systems compound value and readiness for a process.

Among forthcoming or recent regulatory and/or accounting rules changes, which are you monitoring most closely and think are most relevant for PE players?

Shanley: The One Big Beautiful Bill Act, signed July 4, 2025, materially improves deal economics: 100% bonus depreciation restored for qualifying property placed in service after Jan. 19, 2025; new full expensing for eligible qualified production property on a temporary basis; Section 163(j) reverts to EBITDA for adjusted taxable income; and domestic
research & development expensing returns under Section 174A starting in 2025.

Paskin: Accounting rules matter – but cash conversion still rules the day. Accounts receivable/AP discipline, working capital optimization, and faster close cycles turn regulatory neutrality into free cash flow.

Schwartz: Expect diligence plans and timelines to reflect the new HSR filing burden. Build that into deal calendars and communication with sellers.

What compliance concerns have been the most novel of the past year?

Paskin: CMMC 2.0 is now formal – DFARS final rule effective Nov. 10, 2025, with a phased rollout over three years. Early phases accept Level 1 and some Level 2 self-assessments; later phases require C3PAO third-party certification at Level 2 and assessments led by the Department of Defense at Level 3.

Shanley: Cybersecurity and data-privacy hygiene remain underestimated contingent liabilities. Routine health checks and remediation plans protect value – and deal certainty.

What is one closing piece of advice for founders and management teams contemplating a process?

Shanley: Think like a buyer every quarter. Run a sell-side “dry-run” quality of earnings early so you can course-correct before diligence – and maximize value when you are ready.

Schwartz: With exit timing still fluid, sponsors who hold longer are shifting to operational upgrades that extract more value now – and widen the buyer pool later.