Private capital, and everyone else for that matter, are navigating turbulent waters. According to Foley & Lardner's Updated Outlook for Private Equity in 2025, resurgent tariffs and geopolitical uncertainty are reshaping the deal landscape—transforming transaction structuring, valuation expectations, and exit planning. The result? A more cautious, complex M&A market where talent missteps carry higher costs and operational alignment must be embedded from day one.
With credit markets tightening and limited partners demanding clearer value creation roadmaps, firms increasingly recognize that human capital can no longer be an afterthought. It has become the essential lens through which every deal must be evaluated.
These pressures—and opportunities—took center stage at Private Capital Global's Austin Talent Summit where senior talent executives and operating partners from private equity, venture capital, private credit, and family offices explored what it takes to lead and succeed in a market defined by AI, uncertainty, and heightened execution risk. The consensus was clear: human capital isn't just part of the strategy—it is the strategy.
Pre-Deal Human Capital: From Execution to Strategy
The Austin forum highlighted a significant shift—human capital has moved upstream. What was once a post-deal function now plays a critical role in pre-deal due diligence and value assessment. Forward-thinking firms are building structured, repeatable processes for evaluating leadership strength, organizational design, and cultural fit before finalizing term sheets.
Emily Azevedo of Mainsail Partners and Carter Tatum of Trinity Hunt Partners presented compelling conversations showing the rapid evolution of talent functions in private capital. Where once only a handful of in-house talent partners existed across the industry, hundreds now operate. These professionals aren't simply filling roles—they're informing investment decisions and collaborating with deal teams to define value creation.
A key insight resonated throughout: firms that assess leadership capability pre-close and proactively plan for succession typically reduce time to value and create stronger stakeholder alignment. Early CEO transitions, are now seen as evidence of operational discipline when paired with rigorous talent mapping.
Integration strategy has similarly evolved from operational afterthought to fundamental investment thesis component. In today's market, where exit timelines are compressing and value creation windows narrowing, integration must begin during diligence and continue throughout the hold period.
In this environment, human capital functions as a dynamic, evolving system that must adapt to changing leadership needs, new go-to-market strategies, and unpredictable macroeconomic conditions. Top-performing firms are building institutional capabilities around this approach—viewing talent not as transactional but as transformational.
AI as a Partner: Elevating Human Capital Decision-Making
While AI featured prominently in discussions, conversations moved well beyond replacement concerns. Instead, firms focused on how artificial intelligence already enhances their talent processes.
Private capital firms are integrating AI into leadership assessment, succession planning, and executive benchmarking. What previously required weeks of manual analysis—leadership scoring, performance tracking, role benchmarking—now takes days, with greater accuracy and insight.
Consensus emerged that AI serves as a tool for efficiency and effectiveness, not substitution. It can improve hiring decision accuracy, identify subtle organizational risks, and uncover hidden leadership potential. However, human capital remains fundamentally relationship-driven. AI may provide pattern recognition, but human insight drives outcomes.
As Frank Scarpelli, Managing Partner at Sparc Partners, emphasized: "Many firms mistakenly view AI as a technical solution when it's fundamentally a human capital issue. Without skilled people crafting thoughtful prompts and asking the right questions, even the most advanced AI is worthless. The quality of output depends entirely on the human intelligence guiding it. An AI platform is only as valuable as the talent operating it—if your best minds aren't involved in that process, you're investing in expensive technology that will deliver minimal returns."
His observation struck a chord. Leading firms don't collect data for its own sake—they ask better questions, involve talent leaders in data strategy discussions, and build internal fluency that transforms AI into a multiplier rather than a crutch.
From Alignment to Optimization: Looking Toward New York
These themes—from early alignment to AI integration—set the stage for what's next. On April 22, Private Capital Global will host its New York Talent Summit: Optimizing the Talent Playbook.
Building on Austin's focus on alignment fundamentals, the New York summit will dive deeper into advanced optimization strategies. How are leading firms enhancing their playbooks to navigate economic volatility, generational workforce shifts, and increasing geopolitical risk—including potential impacts from expanded tariffs and restricted labor flows?
Discussions will delve deeper into organizational design and global leadership pipeline concerns. As more experienced leaders retire and talent becomes harder to secure, firms must reimagine how they attract, assess, and deploy the people who will determine their outcomes.
Deloitte's Framework: 2025 Global Human Capital Trends
Deloitte's 2025 Global Human Capital Trends report offers a structured framework for future requirements. Titled "Thriving Beyond Boundaries: Human Performance in a Boundaryless World," the report outlines six major trends directly relevant to private capital.
One critical trend balances performance and sustainability. In today's private equity and venture capital landscape, the pressure to maximize returns during relatively short hold periods is relentless. However, Deloitte's research indicates—and summit participants confirmed—that pursuing high performance cannot sacrifice long-term workforce resilience. Modern talent strategies must build for endurance, not just short-term acceleration. The report's comprehensive section on "Reframing the Workforce Balance" explores this tension in depth and should be considered essential reading for operating partners guiding portfolio transformation.
"The days of burning through talent to achieve quick wins are over," notes Mr Scarpelli. "We're seeing investors increasingly factor workforce sustainability into their valuation models. A company that hits targets by exhausting its people creates an artificial peak that collapses during the next ownership phase. Smart capital is now looking at metrics like talent retention through transition, leadership bench depth, and cultural adaptability as leading indicators of sustainable value."
Another key trend shifts from task-based to outcome-based design. Deloitte's framework advocates moving beyond traditional role-based job descriptions toward outcome-based role definition. Within private capital contexts, this means redefining executive positions not by credentials or titles but by the specific transformation required. Whether orchestrating a turnaround, driving technological transformation, or executing global expansion, leadership profiles should reflect the strategic objectives rather than conventional resume requirements.
This approach aligns with the capability mapping and leadership modeling methodologies already gaining traction at leading PE firms. The central question has evolved from "who fits the organizational chart" to "who can deliver on the investment thesis."
Deloitte's emphasis on technology as a co-pilot rather than a replacement echoes discussions from Austin. Rather than treating AI as an isolated capability, forward-thinking firms are integrating it throughout team workflows, decision processes, and leadership approaches. Leading organizations already leverage AI to synthesize comprehensive team assessments, benchmark leadership potential across industries, and develop customized onboarding strategies that accelerate time-to-impact.
The report's insights on reimagined leadership competencies directly inform the evolving expectations for portfolio company CEOs and fund leadership. Agility, empathy, and systems thinking are emerging as essential leadership traits—particularly as firms navigate increasingly complex regulatory environments, operational challenges, and cultural transformations.
As Frank Scarpelli noted, "In our advisory work, we're seeing that the best-performing portfolio companies are those with leaders who can navigate ambiguity. They're not just operators—they're architects of change."
A New Paradigm for Private Capital
Firms that succeed in this next chapter will combine institutional discipline with human-centered leadership. They'll develop talent functions that are proactive, data-literate, and globally attuned. Most importantly, they'll recognize that the true competitive edge in private capital isn't found in spreadsheets or strategy decks—it's found in people.
If that's your firm's direction, then join PCG in New York on April 22nd to turn the next page in your talent playbook. Register today: NY Private Capital Talent Summit: Optimizing Your Talent Playbook
