Lloyds: Financial sponsors in private markets “rethinking” how capital is deployed
Financial sponsors in private markets are “rethinking” their capital deployment strategies to remain “agile” in a complex deal landscape, according to a new report.
The latest Financial Institutions Sentiment Survey 2025 from Lloyds Corporate and Institutional, found that 68 per cent of financial sponsors reported growing optimism about their business outlook over the long term.
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The report, which is based on insights from more than 100 senior leaders at banks, insurers, financial sponsors, and asset and wealth managers, revealed that 63 per cent of financial sponsors are investing in emerging technologies, such as AI and automation, to achieve these growth targets.
Another 63 per cent of financial sponsors also intend to expand operations in existing markets.
“Private markets may be operating in a slower M&A environment, but financial sponsors are staying active by rethinking how capital is deployed,” said Jill Wilson, managing director, head of financial sponsors at Lloyds Corporate and Institutional.
“With innovation as a core focus, institutions are tailoring financing strategies to meet evolving needs.”
She added: “Growth here isn’t just about scale – it’s about staying agile and aligned with an increasingly complex deal landscape.”
More broadly, the survey found that 55 per cent of respondents across financial institutions expect their business to grow over the next 12 months, down from 58 per cent last year. This rises to 83 per cent of institutions that expect business growth over the coming five years.
Expansion within existing markets remains the most common route to growth, cited by 46 per cent of respondents, according to Lloyds Corporate and Institutional, down from 63 per cent in the prior year.
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The survey revealed that investment in emerging technologies is a priority for firms, with 42 per cent having identified AI and automation as critical to driving growth – an increase from 25 per cent in 2024.
“From accelerating AI adoption to deploying capital with renewed strategic focus, financial institutions are laying the groundwork for long-term transformation,” said Lisa Francis, managing director, head of institutional coverage at Lloyds Corporate and Institutional.
“There is a growing recognition that technology will be key to enhancing competitiveness and unlocking value.”
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