As 2025 draws to a close, we're thrilled to share Tioopo Capital's second Founders' Letter, offering insights into the evolving private equity landscape in the UK and France.
Tioopo Capital Founders' Perspectives Letter, Jan 2026
878 KB · Full letter
↓
Key takeaways
- The era of multiple-driven returns is over. Higher capital costs and structural uncertainty mean private equity performance will now be driven primarily by earnings growth and cash generation.
- Valuation discipline has become the primary source of downside protection. Acquiring businesses at 5–7× EBITDA implies 15–20% entry cash yields, enabling capital recovery through operations rather than relying on exit conditions.
- Liquidity constraints are reshaping the industry. With distributions down over 40% since 2021, the rise of continuation funds increasingly reflects delayed exits rather than new value creation.
- Operational capability is now the decisive differentiator. Investors able to actively improve businesses, including through AI-driven productivity gains, will outperform in a market defined by dispersion rather than expansion.