Private Equity Shifts Toward Asset-Heavy Businesses
Thomas Friedberger says investors will favor capital-intensive companies with lower leverage as borrowing costs rise.
Updated on Nov. 9, 2026 in Business Strategy
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Thomas Friedberger said private equity will move toward asset-heavy businesses with lower leverage, as higher interest rates make financing more expensive. The shift reflects a global economic transition from efficiency and consumption-led growth toward resilience and large-scale capital expenditure.
Why it matters
Companies and governments need substantial investment to strengthen supply chains, energy infrastructure, and defence capabilities, while higher rates make that financing costlier. Traditional private equity strategies built on leverage and valuation multiple expansion become harder to execute under these conditions.
The analysis is a qualitative projection rather than a data release, with no specific deal values, rate levels, or fund figures cited. Hyperscalers such as Google are expected to issue debt on capital markets to fund recent large capital increases, though amounts were not specified.
The players
Thomas Friedberger
Friedberger is an industry figure who offered the outlook on private equity's shift toward asset-heavy businesses.
The details
Investors would need to hold asset-heavy companies for longer with less leverage and manage portfolios more intensively at the company level. Greater emphasis would fall on capital allocation and management's ability to generate returns from large-scale investments, while private credit continues to expand in the US and Europe.
Timeline
The analysis was published on November 9, 2026.
Market Landscape
Private credit is expanding in both the US and Europe, and the analysis expects it to keep benefiting from tailwinds even as traditional leveraged private equity grows harder to execute. The move toward capital-intensive investment reflects a broader reordering of how capital is deployed across the sector.
For households, the shift could mean that investment returns increasingly depend on capital-intensive companies rather than leveraged deal structures. Higher borrowing costs may also keep financing expensive for businesses that customers and workers rely on.
The takeaway
Investors and business leaders should weigh capital allocation discipline and the ability to fund large infrastructure investments more heavily as financing costs stay elevated. Private equity strategies relying on cheap debt are likely to face the greatest pressure.
Further reading
Explore more Business Strategy coverage for context on how investors are rethinking capital allocation.
Source note: This article includes information reported by NewKerala.
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