Demitri Diakantonis

Mid-market deal flow hit its lowest level of the year last month, but dealmakers point to strong pipelines and rising seller interest as signs that activity could accelerate through year-end.

Family offices are pursuing direct deals and creating build-and-buy platforms, bringing more capital and control to the lower middle market.

The lower middle-market PE firm used early investments to give LPs visibility into its strategy to help close its $440M fund.

Deal flow cooled sharply in July as macroeconomic uncertainty and a sluggish private equity exit environment continued to weigh on transactions, though year-to-date activity remains ahead of 2025.

With high-quality lower middle-market companies hard to come by, buyers are conducting faster due diligence and making aggressive offers to lock up coveted assets before auctions hit full throttle.