Private equity stays active in Australia's marketing sector

SI Global has published research showing private equity investors remain active in Australia's marketing, media and technology-enabled services sector, though they are taking a more selective approach to new deals.

The firm's global analysis covered 300 platform investments across business services and found overall deal volumes fell 29% year on year. First-money investments dropped 48%, while refinancing activity rose 125% and exit activity began to recover.

That combination suggests investors are taking longer to complete new transactions while working existing assets harder. Macroeconomic conditions, tougher trading environments and greater scrutiny from investment committees are making transactions more rigorous.

Digital and technology-enabled services continued to attract a large share of investment, accounting for almost a third of 2025 platform investments in the global dataset. High-quality lower mid-market businesses also continued to draw strong investor interest, especially founder-led companies with clear market positioning, resilient earnings and experienced management teams.

Separate APAC analysis provided a more detailed picture of Australia's position. It reviewed 31 completed marketing-sector transactions across the region involving private equity or private equity-backed buyers, including 11 Australian-headquartered targets.

Activity involving Australian targets increased from seven transactions in 2024 to 11 in 2025, a rise of 57%. More than half of those Australian deals involved offshore buyers, with cross-border acquisitions rising from three to six over the same period.

International buyers accounted for 55% of Australian target transactions in 2025, up from 43% a year earlier. Buyers from the United States completed four of the 11 Australian deals, while United Kingdom buyers completed two.

The remaining five acquisitions were completed by Australian-headquartered private equity or private equity-backed buyers. Across the wider APAC sample, Australian buyers completed six of the 31 transactions analysed, representing 19% of the regional total.

Sector focus

Among Australian targets reviewed in 2025, Marketing Services represented 36% of transactions. Marketing Technology accounted for 27%, while Digital Services and Data & Analytics each accounted for 18%.

These figures suggest investors are still backing specialist areas within the marketing sector even as the broader market cools. They also show Australia continues to attract interest from both domestic and offshore funds as investors raise the threshold for new platform deals.

The report identified artificial intelligence as an important factor in how investors assess businesses. Buyers are applying greater scrutiny to margins, delivery models and defensibility, while also looking for management teams that can explain how AI will affect market position and commercial plans.

Rather than rewarding simple adoption of AI tools, investors are focusing on whether companies can show a credible path to long-term value creation. That approach aligns with the broader trend towards caution in new investments and tougher due diligence.

For founders and management teams, that means operational discipline is becoming more important in dealmaking. Governance, reporting quality and management depth are being tested more closely as buyers weigh risk in a slower transaction market.

Julia Vargiu, Director, Australia, SI Global, addressed that shift in expectations.

"The question is no longer whether private equity is interested in your sector. The real question is whether your business is genuinely investable. Capital hasn't disappeared. Investor expectations have increased. The businesses attracting the strongest interest are those with differentiated capability, resilient earnings, experienced leadership teams and a clear strategy for creating value," Vargiu said.

Michael Chin, Director, SI Global, said buyers are examining businesses more thoroughly before committing capital.

"Businesses preparing to attract investment should assume buyers will test every assumption. Strong governance, clear reporting, management depth and repeatable earnings are increasingly becoming competitive advantages in themselves. The strongest outcomes come from founders who invest in governance and operational maturity well ahead of entering a transaction process, rather than relying solely on growth narratives," Chin said.

The global dataset drew on analysis of 80 private equity firms across the UK, Europe, the US and APAC, covering 266 portfolio companies in business services. Of the 300 platform investments reviewed, 25 were classified as APAC, and the review identified 14 Australian-headquartered portfolio companies.

Overall, the findings point to a market that still has capital to deploy but is imposing tighter standards on where that money goes. In Australia, the rise in cross-border acquisitions and the concentration of interest in specialist marketing and technology segments underline that investor appetite remains intact even as the bar for investable businesses rises.