Patrick Coleman on Midstream’s Most Active Period in Years 

While volatile oil prices have introduced uncertainty across the energy sector, midstream is experiencing something closer to the opposite effect. The geopolitical disruptions reshaping global supply have reinforced one fundamental truth for midstream operators: volumes are coming. The question is no longer whether production will be drilled, but when and that shift in certainty is driving a meaningful acceleration in midstream deal activity. 

Patrick Coleman, Managing Director and Co-Head of Midstream at Jefferies, sat down at the firm’s annual Energy & Power Summit to share his views on M&A trends, the resurgence of infrastructure capital, and the pivotal role natural gas will play in the years ahead. 

Certainty Replaces Caution 

Coleman drew a sharp distinction between how the current environment is affecting upstream and midstream. Where upstream companies face direct commodity price exposure, midstream operators are largely insulated from day-to-day price swings as their business is built on volume. “From a midstream perspective, there’s now a sense of a lot more certainty that things will get drilled,” he explained. “It’s no longer if, it’s when.” 

That shift in sentiment is translating into deal activity. Assets that might have attracted limited buyer interest six months ago are now drawing serious attention, as buyers recalibrate the likelihood of sustained production activity across key basins. “A lot of the buyers are now saying there’s a good chance there’s going to be sustained activity,” Coleman said. 

The public midstream companies — Williams, Energy Transfer, Enterprise, Targa — have been the dominant buyers over the past three years, and Coleman sees that continuing. These companies are being valued on growth and growth alone, creating a strong incentive to acquire even mid-tier assets that would previously have been passed over. “Buying the inventory that’s not must-have but nice-to-have allows them to grow faster than they otherwise would have been able to,” he said, pointing to the synergies and WACC advantages that make smaller bolt-on acquisitions increasingly attractive. 

The Shift Toward Gas 

The more significant structural shift Coleman identified is a reorientation of buyer focus from NGL infrastructure toward natural gas. The conflict in the Middle East has made LNG exports substantially more valuable (some public LNG names have nearly doubled in the past month) and the gas infrastructure needed to supply both existing and prospective export projects has moved to the top of the priority list. 

At the same time, demand growth from data centers and AI is creating a domestic pull for gas that shows no sign of abating. “It’s easy to plot the demand growth,” Coleman said. “There’s a clear line of sight and no one has the same type of viewpoint from a natural gas perspective that they had about oil demand during Covid that it might be permanently destroyed.” 

That confidence is drawing infrastructure funds back into the sector after a period of LP-driven hesitation around hydrocarbon investment. “They’ve raised a lot of money and they’ve been focused in other areas,” Coleman noted, “but I do suspect they’ll start to come back.” With investment horizons of ten to twenty years and cost of capital in the low teens, natural gas infrastructure offers a duration and visibility of return that is difficult to find elsewhere. 

The Permian’s Gas Moment 

Coleman flagged the Permian Basin as the most important near-term dynamic to watch. With 4.5 billion cubic feet per day of new gas takeaway capacity coming online out of the basin by end of 2026, the relief of the Waha pricing bottleneck — where producers have effectively been paying to have gas removed — could unlock a wave of gas-weighted development in the Delaware and Midland sub-basins. “If Waha no longer is negative and you can actually have deep locations that are more gas weighted where you’re getting an economic return from that gas,” Coleman said, “that’s a significant change.” 

He expects the major public upstream companies, which now hold around 90% of Permian acreage following years of consolidation, to remain capital-disciplined through 2026 given commitments made to investors. The action, in his view, will come in 2027 when private players with undeveloped acreage accelerate their drilling cadence to coincide with the new takeaway capacity. 

Canada and the North American Balancing Act 

Coleman closed with a broader geopolitical observation that he sees as underappreciated. As Middle Eastern supply comes under pressure, the United States will need to lean more heavily on North American supply, particularly Canadian heavy crude, which feeds Gulf Coast refineries. The trade tensions of recent months have complicated that relationship at precisely the wrong time. 

“I think we’re going to need all of our help keeping together in North America to make sure that doesn’t creep in and cause massive inflation in the United States,” he said. Midstream infrastructure (pipelines and transportation networks) will be central to managing that balancing act. Coleman expressed cautious optimism that the more adversarial dynamics of recent trade negotiations could give way to more pragmatic cooperation as the global supply picture tightens. 

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The confluence of geopolitical disruption, surging LNG demand, and returning infrastructure capital has set up midstream for what Coleman described as its most favorable deal environment in years. The biggest catalyst, he suggested, may already have arrived. 

For more insights from Patrick Coleman and Jefferies, the leading advisor on M&A transactions in the energy sector, visit the firm’s dedicated thought leadership site.

Amid Aerospace & Defense Boom, Investors Continue to See Opportunities in Business Aviation

The aerospace and defense industry is in its most active capital market period in decades.

Global M&A deal announcements surged 41% to an all-time high of 532 transactions in 2025, as new defense priorities – in the U.S. and abroad – drove demand for next-generation technologies and capabilities.

The IPO market has reopened to the industry, and private equity is playing an increasingly important role. Meanwhile, the defense sector, as reflected by the ITA ETF, returned more than 38% so far this year, far outpacing the S&P 500.

In recent years, growth in aerospace and defense has been uneven. In the post-COVID recovery, Maintenance, Repair, and Overhaul (MRO) companies, Fixed Base Operators (FBOs), and aftermarket players outperformed. At the same time, Original Equipment Manufacturers (OEMs) lagged due to production and supply chain constraints. Today, every segment of the industry is participating in the upcycle.

Amid this broad-based growth, a once unheralded corner of the aerospace industry is nonetheless managing to stand out:

Business aviation. It is increasingly attracting private equity funds, family offices, and growth equity investors seeking above-average risk-adjusted returns.

For much of its history, business aviation occupied a peculiar blind spot in institutional finance.

Wall Street focused on commercial airlines, Airbus, Boeing, and other large defense contractors, while the private jet industry was dismissed as too insignificant and too scattered for serious investors. That mindset has now shifted.

A Permanent Shift in Demand

The most significant development in business aviation over the last five years has been a major expansion in the addressable market. COVID-19 forced millions of travelers to try private aviation out of necessity – and most didn’t return to commercial flight. Once travelers experience the productivity, privacy, flexibility, and reliability of private travel, their flying preferences change permanently.

The data confirms it. Fractional ownership is the only major category showing consistent post-pandemic growth, while traditional charter and whole-aircraft ownership have modestly declined. This shift matters to investors because fractional operators generate recurring revenue, multi-year contracts, and predictable utilization patterns – exactly the kind of clear financial profile that conventional valuation methods favor.

The Infrastructure Play

For investors who prefer not to choose operator winners, business aviation offers something more stable: infrastructure-like businesses that profit regardless of which company gains market share. FBO and MRO providers, along with avionics shops, parts distributors, and software platforms, service every aircraft, regardless of ownership or deployment.

FBOs – the fuel, handling, and service facilities at airports – clearly exemplify this concept. The owner of an FBO lease at a major hub generates revenue from every landing and refueling, regardless of whether the aircraft belongs to a large business aviation company like NetJets, a Fortune 500 flight department, or a single-owner operator.

Lease terms are lengthy, switching costs are high, and so too are regulatory entry barriers – exactly the kind of infrastructure investors value most. The two leading U.S. FBO chains, Signature Aviation and Atlantic Aviation, are already supported by some of the world’s most experienced institutional investors, with enterprise values nearing or surpassing $10 billion each.

MRO businesses have a similar profile with an added element: regulatory requirements. Aircraft maintenance is not optional. Inspections, certifications, engine overhauls, and avionics upgrades are performed on fixed schedules regardless of economic conditions, making MRO revenue highly predictable and resilient.

Insulated from Geopolitics

Business aviation also represents more of a pure play on the U.S. market than commercial aerospace and aviation.

The U.S. accounts for about 60-65% of global business aviation activity, and the sector’s main operators, MROs, and FBOs are mostly domestic companies. This shields investors from currency fluctuations, trade tensions, and sanctions regimes that complicate commercial aerospace investments. During times of global uncertainty, business aviation becomes a more attractive investment.

Consolidation Upside

The pandemic-era acquisition frenzy, in which major operators rushed to buy charter companies and fleets at high prices, has ended. The landscape now features large, well-funded fractional and charter brands at the top and a scattered group of smaller operators below.

This presents a clear consolidation opportunity. The mid-market B2B charter sector, featuring operators that supplement large fractional brands, was significantly weakened during COVID. Meanwhile, the demand for these services has increased. A disciplined management team backed by growth capital could develop a scaled operation to fill this gap, with an attractive eventual exit to a major brand or financial sponsor.

At the high end, new fractional entrants are attracting receptive capital. The 2025 KKR investment in BOND – founded by veterans of previous successful fractional ventures – illustrates the demand from large investors for trusted operators, proven models, and a growing market. The major fractional providers still account for only a small share of potential demand, leaving room for more scale players targeting the ultra-high-net-worth segment.

Approaching Public Market Liquidity

Business aviation is approaching a significant milestone as large-scale public-market comparables emerge. Standard Aero’s 2024 IPO, which valued an aerospace MRO company with significant exposure to business aviation at a considerable premium, hinted at what public markets will pay for well-positioned assets. However, pure-play business aviation companies at the operator and FBO levels have not yet gone public as standalone entities.

When those listings arrive (and considering the scale achieved by Signature, Atlantic, Flexjet, and Vista, we know that time is coming), they will establish transparent public valuations and almost certainly attract additional institutional attention.

Private equity investors who establish positions now, before public price discovery, stand to benefit from the multiple re-rating that usually occurs when a sector transitions from private to public trading. This pattern is well-documented. The initial wave of public listings in a previously private sector tends to narrow private-market discounts and boost valuations for similar assets.

The Investment Playbook

The most appealing entry points today are in infrastructure and supply chain – FBOs, MROs, parts distribution, and aviation-specific software – where profit visibility is highest, and valuations remain reasonable compared to underlying cash flow.

Those with a taste for operator-level investing need to be selective. The market now favors fleet discipline, certificate efficiency, strong management, and a credible growth plan.

Business aviation has evolved from Wall Street curiosity to a genuine institutional asset class. The space is defined by durable demand growth, recurring-revenue models, infrastructure-like economics, domestic shielding from geopolitical risks, and an upcoming wave of public-liquidity events. The opportunity to establish positions while the sector still trades at a valuation discount relative to its cottage-industry history is shrinking.

Business aviation is set for takeoff.

Software’s Road Back

The winter of 2025-2026 was a brutal season for the software industry.

What analysts came to call the “SaaSpocalypse,” a months-long compression of software valuations driven by existential fears about artificial intelligence, shook the confidence of executives and investors who had long treated the dominance of enterprise software as a given.

Their anxiety raised profound questions for the industry, most notably: If AI could automate the work of entire teams, would companies need far fewer software licenses?

By April, a tentative recovery had taken hold amid analyst upgrades and ServiceNow’s disclosure that its AI platform had reached a $1 billion annual contract value run rate. The iShares Expanded Tech Software Sector ETF (IGV) had its best week since 2001, during the week ending Friday, April 17.

It was against this backdrop that CEOs of best-in-class global technology companies, along with senior decision makers from the world’s most active public and private investors, gathered in San Diego on April 14 and 15, 2026, for the Jefferies Private Growth Conference.

We sat down with several conference participants to get their thoughts on the state of the software industry and whether its recent rebound represented a durable turning point.

Brent Thill, Managing Director, Software/Internet Research at Jefferies:

The software industry, once among the highest multiple sectors, now has the lowest multiples on Wall Street. That’s because many believe the death of software is here and that two companies will eventually dominate us.

We think that is simply wrong. Many companies are thriving in AI across different models, from consumer to enterprise. They’re building vertical models for health care, government, retail, and automotive. We think that if you speak the language of those industries and integrate AI into a workflow, there’s an incredible opportunity ahead.

In the long run, AI and the traditional software world will coexist in harmony. Ultimately, many legacy software companies will partner with new companies, such as OpenAI and Anthropic, to enhance their solutions. The enterprise companies we cover have some of the largest distribution footprints in tech, and they can leverage those channels and their data.

Zeb Evans, Founder and CEO of ClickUp, the first Converged AI Workspace, replacing 20+ siloed tools with one AI-native platform where every workflow runs on full business context

I believe much of the talk about the death of the software industry is overblown. I think it’s ridiculous to assume that everyone will build their own software for everything. If building software isn’t your focus, why would you build it? If that were the case, why doesn’t everybody build their own website now? We’ve had website builders for decades, and they are still with us.

Jason Greenberg, Co-Head of Global Technology, Media and Telecom Investment Banking at Jefferies

Many incumbents and emerging companies are presenting new solutions that harness AI to develop markets and create opportunities. If you look at the software market from 2000 to 2025, as it shifted from a premise-based to a cloud-based model, the overall opportunity grew sevenfold.

And that’s in a world where software was primarily competing for a percentage of tech spend. Now, AI-enabled software is competing for a portion of labor spend. So, you could certainly see a 20x increase in the market’s overall size.

What does that mean? It means there’s plenty of opportunity for an amazing number of new startups to achieve billion-dollar-plus outcomes in very short periods, while incumbents’ vendor sets remain intact. So, there are plenty of reasons to be optimistic and bullish after we get through this initial stage of fear.

Gaurav Kittur, Managing Director, Global Co-head of Internet Investment Banking at Jefferies

These AI tools have become so accessible that people out there who may not have a technical degree but have creative ideas for an app or software application can now create and monetize them. This will create an environment with more applications and software.

Meanwhile, companies are spending a lot of money on CapEx to train models, and those models will be incredibly intelligent. They already are, but they’ll be even more so. And they are democratizing intelligence. Everyone will have access to it and be able to integrate it into their apps. So, you’re going to see a lot of innovation and creativity around vertical applications.

Evan Osheroff: Managing Director, Software Investment Banking at Jefferies

I have been doing this for almost 20 years, and this is the weirdest, hardest, most challenging time I’ve seen in software. Even during the great financial crisis and COVID, some deals were getting done. Right now, there’s almost nothing happening.

Why? If you read what many investors are saying, there’s no terminal value in any of these companies, which I disagree with as a software banker.

At the same time, if you’re in private equity, you need financing. There’s effectively no credit market right now, or at least nothing reasonable. Anyone who needs financing and doesn’t have the capital to pay all cash can’t close a deal.

Amidst all this, people overlook that enterprises with software in place for decades do not rip it out overnight. Companies are not going to naturally trust an AI-native business that didn’t exist three years ago.

I am very much in the camp that AI will enable job creation and accelerate and enlarge economic output. There will probably be a trough with short-term pain. But it will be a long-term gain.

Five Trends Shaping the Future of Power and Utilities

Scott Beicke, Americas Head of Power, Utilities & Infrastructure, and Georges Arbache, Managing Director, Power, Utilities & Infrastructure, shared their perspectives on the forces reshaping the sector at the Jefferies Energy & Power Summit 2026.

1. Demand Growth at a Scale the Grid Has Not Seen in Decades

After several decades of flat power consumption, the U.S. electricity market is entering a period of demand growth that is fundamentally changing the investment calculus across the sector. Projections across various sources point to a 2 to 2.5% compound annual growth rate in U.S. electricity demand — translating to 400 to 500 gigawatts of new capacity that will need to be built, with 75 to 200 gigawatts of that being firm capacity.

“Power has been taken for granted for a while,” said Beicke. “Of late, with the advent of AI-driven data center power demand growth, led in part by the hyperscalers, demand has started to take off — and that means we need more generation of all kinds.” Arbache pointed to Texas, data center alley in the Mid-Atlantic, and parts of the Mid-Continent as the most active build zones, with activity increasingly spreading across the country.

2. Gas Generation Is the Bridge

Both Beicke and Arbache were clear that meeting near-term baseload demand leaves little room for debate on fuel source. Hyperscalers and large data center operators need power on a 24/7 basis, and with new nuclear builds still many years away at scale, gas generation is the only reliable way to fill the gap. “Gas generation has been just white hot,” said Beicke, noting the sector shows no signs of cooling.

The financial case is equally compelling. New combined cycle plants now cost $2,500 to $3,000 per kilowatt to construct (two and a half to three times comparable costs five years ago), yet comparable operating assets have traded at around 50% of those replacement costs, suggesting further room to run on valuations. Long-term contracts with hyperscalers, who need to de-risk the economics of new builds, are providing the underwriting foundation for a new wave of gas generation investment.

3. The IPP of the Future Is Taking Shape Through M&A

The defining structural shift both executives identified is the emergence of what Beicke calls the “IPP of the future”: a fully integrated power platform combining gas generation, renewables, storage, and nuclear. “Today we have a lot of IPPs that are focused more on either the thermal side or the renewable side,” he said. “We believe the IPP of the future is going to see a combination of the legacy thermal IPPs and the legacy renewable IPPs come together.”

Arbache sees the renewables industry, still highly fragmented, as the piece that needs to consolidate first before it can serve as an effective merger partner for the larger thermal players. “We are very early days in the consolidation cycle,” he said, noting that most renewables platforms have historically been owned by control-oriented sponsors, making mergers of equals structurally complex. The first few transactions will be difficult, but once a track record of successful combinations is established, he expects momentum to accelerate significantly.

4. Affordability and Reliability Are the Sector’s Defining Constraints

Rapid capacity addition brings its own pressures. Both executives flagged affordability as an increasingly central concern, one that Washington is already beginning to act on. “We do not want the ratepayer to be burdened with the cost of funding and fueling those data centers,” said Arbache. Beicke was equally direct: “Affordability is going to play a key role,” he said, pointing to rising electricity bills as a political flashpoint that the sector will need to navigate carefully.

Reliability is the other constraint. Beicke warned that certain regions are closer to acute reliability events than the current level of public debate would suggest. “We’re adding a lot of capacity, but we’re adding a lot of demand,” he said. Transmission investment and storage deployment are the primary mitigants, but he expects reliability to become a more prominent issue across the sector over the next five years. On the interconnection side, Arbache pointed to the need for a far more streamlined process to allow new capacity to actually reach the grid at the pace the market requires.

5. Investors Are Returning and the Universe Is Expanding

M&A activity in the power sector is at an exceptional level, driven by a convergence of strategic and financial motivation. Power-focused private equity that accumulated assets through years of flat valuations is now monetising into a market where demand tailwinds have driven significant appreciation. Strategic IPPs — Constellation, Vistra, Talen, Capital Power — are deploying capital aggressively to grow in a sector that finally has the wind at its back.

Infrastructure funds, which pulled back during Covid under LP pressure around hydrocarbon investment, are returning with fresh capital and a clearer mandate. Arbache noted that the line of sight to demand growth from data centers has been decisive in bringing them back. Beicke expects the investor universe to continue widening: “Five years from now, there will be more investors in the space than there are today and today there are considerably more than there were five years ago.” Financing markets remain robust, supported by the hard asset nature of power infrastructure and the secular tailwinds underpinning collateral values.

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For more insights from Scott Beicke, Georges Arbache, and Jefferies, the leading advisor on M&A transactions in the energy sector, visit the firm’s dedicated thought leadership site.

The Little-Known Financing Tool Gaining Momentum Across the Energy Sector

As oil and gas M&A activity has surged over the past two years, a relatively new financing structure has quietly moved from the margins of the market to the centre of some of its most competitive deal processes. PDP securitization, the asset-backed financing of proven, developed, and producing oil and gas assets, has grown from a niche proof of concept into a mainstream capital markets product, and its influence on how upstream deals get done is accelerating.

Peter Walgren, Co-Head of Securitized Markets Group Capital Markets at Jefferies, and Niall Devaney, Senior Vice President at Jefferies, sat down at the firm’s annual Energy & Power Summit to explain how the product works, why it has caught on, and where it is headed next.

What Is PDP Securitization?

The asset class was invented around 2019, and its logic is straightforward. An oil and gas operator takes a pool of producing wells (assets with a known, measurable decline curve) and places them into a separate legal entity. The commodity price risk and basis risk on those assets are then hedged out, typically covering 80% of production over five to eight years. With fixed commodity prices, fixed basis risk, and fixed-rate debt sold primarily to insurance companies and institutional investors, the only remaining variable is operational risk: something investors in the space have become comfortable underwriting.

“By making these variable things fixed, we can make the asset an investment grade asset,” said Walgren. “That unlocks investment grade rated cost of capital for companies that would never imagine issuing single-A rated debt.” The result is senior bonds pricing at mid-one hundreds to low-two hundreds spread to treasuries, with a weighted average cost through the capital stack of around 2.5% over treasuries — a mid-six yield that is substantially more attractive than what issuers could access through high yield or reserve-based lending markets.

For investors, the appeal is equally clear. “The corporate credit market offers 75 to 150 basis points over treasuries,” explained Devaney. “What we can offer through securitization is 200 to 250 basis points: investment grade credit with meaningfully better yield.” The bonds amortize in line with the underlying asset, creating a steady return of capital that investors can redeploy into new issuances, giving the market a natural velocity that sustains demand over time.

From Portfolio Tool to M&A Weapon

The product launched as a capital structure optimisation tool, a way for long-term asset owners to monetise future production without going through a full sale process. That use case remains active, but the more significant recent development is its growing role in M&A.

By providing investment grade financing at up to 70% loan-to-value against the present value of the assets (a level that would be unachievable in a traditional reserve-based lending structure), PDP securitization allows buyers to enter competitive processes with a materially stronger bid. “Putting low-cost, fixed-rate funding at a 70% LTV against the present value of the asset makes the bidder a compelling bidder,” said Walgren. Devaney added that in the current environment, where near-term oil prices have risen sharply, the hedging requirement built into the structure offers an additional advantage: it locks in those elevated prices at close, whereas a conventional sale process may or may not capture them.

The structures are also portable; they can travel with the assets through subsequent transactions and Jefferies has developed a bridge product that allows buyers who are new to the structure to step into it at day one of closing, lowering the friction for first-time issuers.

A Market With Significant Room to Grow

Since its inception in 2019, the PDP securitization market has seen approximately $20 billion of issuance across more than 15 issuers, with deal sizes growing from sub-$500 million to routinely exceeding $1 billion. Walgren sees a clear pathway to the market reaching the scale of comparable esoteric ABS categories: data centre securitizations, fibre networks, and whole business securitizations have each grown into $40 billion asset classes.

The most active issuers to date have been small and mid-cap private companies without access to the investment grade market, but the largest user of the product is now a public company, and both Walgren and Devaney see the issuer universe broadening considerably. Larger private companies are increasingly using the structure to deleverage corporate balance sheets, replacing higher-cost on-balance-sheet debt with non-recourse securitisation proceeds.

Geographic and sectoral expansion are also on the horizon. Midstream assets, with their fixed-price shipping agreements already providing much of the cash flow predictability that upstream assets achieve through hedging, are a natural adjacent application. International transactions in stable, low-political-risk jurisdictions represent another frontier, though the larger well sizes offshore will require structural adaptation.

“The use case is broad,” said Walgren. “We could easily see this expanding to the scale of what we’re doing in data centres or fibre.” Devaney was equally direct about the trajectory: “As the market continues to evolve, as more issuers and investors become familiar with the product, we expect expansion across almost every aspect of capital markets within the upstream and broader energy space.”

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What began as an esoteric instrument for a handful of specialist investors has matured into a product reshaping how energy assets are financed, acquired, and valued. For buyers, sellers, and long-term asset owners across the upstream and midstream sectors, PDP securitization is becoming a tool that is increasingly difficult to ignore.

For more insights from Peter Walgren, Niall Devaney, and Jefferies, the leading advisor on M&A transactions in the energy sector, visit the firm’s dedicated thought leadership site.

Pete Bowden on Why the Middle East Crisis Is a Turning Point for Global Energy Markets

The closure of the Strait of Hormuz has sent shockwaves through global energy markets. With 20% of the world’s ready oil on the water at any given moment, and the majority of it passing through the Strait, the conflict in the Middle East has exposed just how thin the margin is between global supply and demand. For energy markets, the consequences will be felt for months and years to come.

Pete Bowden, Global Head of Industrial, Energy and Infrastructure Investment Banking at Jefferies, sat down at the firm’s annual Energy & Power Summit to give his assessment of the crisis and what it means for oil prices, M&A activity and the long-term shape of global energy supply.

A Supply Shock With Long-Term Consequences

Bowden was direct about the scale of the disruption. “Twenty percent of the world’s ready oil is water-borne at any moment in time,” he explained. “If we have a single vessel that is bombed or hits a mine, it’s going to shut down every insured crude carrier in the world.”

But the Strait of Hormuz is only part of the story. Major oil companies have evacuated personnel from the region, and Bowden argued that production delays will far outlast any immediate ceasefire. “They’re not going to move their employees back into the region at the first sign of peace — they’re going to want a long-standing, proof positive indication that their personnel are safe.”

The LNG market faces its own reckoning. Of the 20 million tons of LNG capacity taken offline, Bowden noted that 13 million tons will remain offline for years, not months. Damage to Qatar’s LNG complex alone is estimated to take four to five years to repair and that timeline will not  begin until the region stabilizes.

The historical precedent is sobering. Before the Iraq War, the country produced six million barrels per day. Today it produces four million. “Some of this production is offline longer term than people expect,” Bowden observed.

Oil Prices: A New Floor

On pricing, Bowden offered a clear-eyed framework. In the immediate term, he believes $95 to $105 per barrel is appropriate given current conditions, with $120 oil possible if the conflict escalates further. But even in a scenario where tensions ease, he does not expect a return to pre-conflict pricing.

“If Iran were resolved and we went back to the previous state of affairs, $65 oil would be $80 oil,” he said. “That’s just the market preparing itself for the next shock. We have proven that things can change quickly, and once they do, there’s very little time to react.”

Longer term, Bowden’s base case is a $75 to $85 per barrel range, a meaningful re-rating of where the market will settle. “Every time there is geopolitical conflict, it’s a reminder that while energy is 8% of the economy, it’s the first 8%.”

The M&A Market: Active, With a New Anchor

Despite the volatility, Bowden reported that dealmaking has continued. The M&A market has coalesced around a WTI assumption of $75 to $80 per barrel: neither buyers pricing in a windfall nor sellers holding out for peak prices. “Geopolitical conflict is always a reminder of the essential nature of the commodity,” he said. “There is always a premium on domestic supply.”

E&P has been the most active vertical, but Bowden flagged acceleration in midstream and oilfield services as well. Offshore drilling is returning to markets like Brazil, driven by scarcity and a renewed willingness to take on larger, higher-capex projects.

On international M&A, Bowden sees growing interest, particularly from international players comfortable operating in higher-risk jurisdictions. U.S. companies, while primarily focused on domestic development, are also beginning to look outward.

America’s Relative Advantage… and Europe’s Problem

The United States enters this crisis from a position of relative strength. Domestic energy independence insulates the country from the worst of the supply shock, and healthy natural gas storage levels reduce the risk of a gas crisis. “I don’t believe that we will have shockingly high natural gas prices,” Bowden said. “We could very well have a crisis on the crude oil side.”

Europe, by contrast, faces a far more difficult situation. Already paying multiples of U.S. natural gas prices, the continent’s economy is growing at roughly 1% compared to 4% in the United States. “Make no mistake,” Bowden said, “affordable natural gas is a major driver of the economy in the United States… and the lack of affordable natural gas is a problem elsewhere.”

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The Middle East crisis has reordered assumptions across the energy sector: on pricing, on supply security, and on where capital will flow next. For Bowden, the lesson is one the global economy keeps being forced to relearn: energy security is the foundation on which everything else rests.

For more insights from Pete Bowden and Jefferies, the leading advisor on M&A transactions in the energy sector, visit the firm’s dedicated thought leadership site.

Growth at a Discount: Opportunities Abound in the APAC Secondaries Market

The global secondary market saw record volume in 2025, and growth can increasingly be found in the APAC region.  

APAC accounts for less than 10% of the now-$240 billion secondary market. But investor appetite is growing as APAC secondary funds have enough dry powder to fund three years’ worth of deals.

The APAC secondary market is propelled by many of the same factors driving global secondary growth. They include larger, more sophisticated pools of capital, investors developing more industry- and sector-specific practices, and both LPs and GPs turning to the secondary market to access liquidity amid a prolonged distribution drought.

Yet the APAC region – and its component countries – also present a distinct opportunity set.

Some of the challenges inherent to the region, such as relatively muted M&A activity and a narrower set of exit options, have made secondaries a preferred route to liquidity for both GPs and LPs. Although APAC buyout and venture funds continue to trade at a lower proportion of NAV than their counterparts in North America and Europe, this also means many high-growth companies in rapidly expanding markets can be acquired at a comparative discount.

In March 2026, APAC, like the rest of the world, was shaken by conflict in the Middle East, which has destabilized global energy markets. However, the APAC secondary market still offers many opportunities for investors aiming to acquire secondary assets in the region or rebalance away from it. Here are some of the key factors we expect to influence the APAC secondary market this year and beyond.

  • Growth at a Discount: Asian countries face different risks than those in North America and Europe, but those risks are often baked into lower prices. Particularly striking are the many investments in venture-backed and growth companies made in the 2020 to 2022 period when valuations were at their peak. When many of these companies come to market now to raise a new round of financing, their valuations are 50% or more below what they were a few years ago.
  • Investment opportunities differ greatly by country, as do the risks, risk premiums, and investor bases involved in buying secondaries. Australia, Japan, and, to some extent, Korea are developed economies that, in many ways, resemble the U.S. They have private equity ecosystems focused on mid-market buyout transactions, with bank financing available. India, China, and Southeast Asia are more representative of the growth side of the Asia story, with numerous VC-backed growth companies offering investment opportunities. 
  • Secondary investors are becoming increasingly positive toward China. A surge in Hong Kong IPOs has helped foster a more constructive view of China-related opportunities. While buyers remain selective, participation levels have increased meaningfully. Five China continuation vehicles closed in 2025, up from one in the prior year, as GPs have become more realistic about valuation expectations. 
  • Venture/growth strategies continue to dominate LP transaction volume. The supply of Asia buyout funds remains relatively limited for highly sought-after regions like Australia and Japan. Venture and growth strategies experienced a sharp uplift driven by IPO activity. This was especially true in China.
  • LPs are using secondaries to rebalance or reduce exposure to Asia. APAC LPs continue to utilize the secondary market for liquidity and portfolio rebalancing. Most APAC LP portfolios often include North American and European exposures, reflecting more favorable pricing dynamics. Meanwhile, a growing number of large, global institutions are considering rebalancing strategies for their legacy APAC private equity portfolios.
  • AI may be less disruptive in Asia than in the U.S., particularly in China, where software providers historically have had limited pricing power. The market is dominated by a small number of large platforms, while enterprise customers typically demand deeply customized solutions rather than standardized, per‑seat subscription products. There is no equivalent to Salesforce, Workday, or ServiceNow: companies that depend heavily on recurring subscription revenue from per-seat software. Investors in the secondary market for Asian companies are therefore not exposed to the same AI-driven de-rating risk that has significantly affected US software stocks. In Asian secondary financial markets, AI is generally seen as a capability enhancer rather than an existential threat to revenue.
  • GP-led transactions, particularly continuation vehicles, are increasingly viewed by GPs as part of the liquidity toolkit, supported by a more sophisticated secondary investor base that underwrites opportunities on an asset-by-asset basis, applying differentiated financial metrics and forward-looking fundamentals rather than blanket regional discounts.

As the secondary market has grown, so too has the Jefferies secondary advisory team, which now counts over 90 bankers globally. In APAC alone, we have advised on more than 25 secondary transactions, led by both general partners and limited partners, totaling $10 billion in volume.

How European Mid-Caps Became One of the World’s Most Compelling Investment Stories

There is no shortage of explanations for why European equity markets had a banner year in 2025.

A falling dollar. Rising geopolitical tensions. Undervalued European companies selling at historic discounts. The rotation out of technology and into HALO (Heavy Asset, Low Obsolescence) stocks.

But the most powerful driver of surging European equities may also be the most durable:

Europe has many exceptional, well-run businesses.

According to Dominic Lester, Jefferies EMEA Head of Investment Banking, European companies have always had to deal with fragmented markets, different regulations, and different languages. So, when they do achieve scale, that means you have a business that knows how to deliver value and tends to be very resilient.” Although the outbreak of conflict in Iran has rattled markets in the short term, the long-term growth story for many European companies remains compelling.

On March 24, in London, Jefferies will host its sixth annual Pan-European Mid-Cap Conference, where over 200 European businesses and almost 500 investors will forge connections and discuss the most notable trends shaping the sector.

We recently spoke with Dominic Lester and his colleague Lorna Shearin, Deputy Head of EMEA Investment Banking, to get their take on the state of European economies and the transaction environment. We also connected with Ed Keen, Head of Equities EMEA, and Alex Coffey, Head of EMEA Research, for additional perspective on why mid-sized companies are attracting so much investor interest.

Here are some of their most notable insights:

Finding Excellence in European Equities

Dominic: There are so many genuinely global businesses with leading capabilities based here, particularly in old-world sectors like industrials, mining, and aerospace and defense, which is obviously in and of itself becoming a major theme.

Private equity from the U.S., Asia, and around the world is increasingly interested in these kinds of companies, often available at low multiples. There is a geopolitical element here, too: A fair number of LPs are reallocating money from the U.S. to Europe.

There is also real leadership in terms of European companies developing interesting applications to leverage AI technology. In fact, I recently read a big study showing that European companies and their employees – particularly those in Scandinavia – are further along in adopting AI technology and tools than their peers in the U.S.

On the European Deal Environment

Lorna: Last year, there were fewer transactions overall, but you saw many large transactions, along with take-private and mega-sponsor deals becoming more prominent. Sponsors still have a large backlog of unsold assets, which is why continuation vehicles remain an important part of their portfolio mix. One distinctive dynamic in Europe is the tremendous number of family-owned and founder-led businesses. We are entering a generational transition that will present a diverse set of opportunities across geographies.

On the Unique Opportunity in Midcaps

Ed: Europe has a very different liquidity profile than the U.S., with U.S. companies, on average, much larger and having access to deeper liquidity. Consequently, US volumes have been much larger than those in Europe, which has a comparatively limited level of very active retail investor participation. One outcome of this is that European midcaps have market caps more like those of U.S. small caps. This does, however, create a lot of opportunity. When you invest in European midcaps, you often have a chance to generate more alpha because these businesses aren’t as well-covered or understood by the market. This is one of the reasons Jefferies has invested so heavily in our equity research, to the point that we are number one in mid-cap coverage across pan-European equities.

As 2026 began, you saw companies everywhere, including in Europe, being evaluated for their exposure to AI disruption risk. No one knows for sure how that will play itself out. In the meantime, whilst most of the leading-edge AI technology development is happening in the U.S. and Asia, Europe is investing heavily in supplying much of the infrastructure the AI industry needs. The difference in diversification is drawing more money out of the US and into Europe.

Alex: Today, the mid-cap universe in Europe is trading at a 10% discount to large caps, despite generally offering more growth and strong competitive advantages. Think about the journey of a company that IPOs, starts as a small-cap, and grows into a mid-cap. There’s a big survivorship bias right there, because only the best ones make it to this point. Look around Europe, and you will also see many companies you have probably never heard of, making everything from skiing helmets to bike racks, that are the absolute best at what they do. You see a lot of great European midcaps that are asset-light – so they have great gross and operating margins – that are central to helping other companies design and develop products.

Finally, there’s also some simple reversion happening. You can believe that the U.S. is the most open and dynamic economy in the world, yet still think some rebalancing was in order when U.S. stocks reached nearly two-thirds of the global equity market value, as they did recently.

On What’s Ahead

Lorna: I think we are entering a cycle defined less by financial leverage in capital structuring and more by operational leadership. Some of these companies have absolute excellence in navigating different jurisdictions and regulations. They are led by people with good operational leadership who tend to have good strategic leadership and a good sense of where there might be acquisition or consolidation opportunities. Investors want to back these kinds of leaders. Advice matters more than ever in an environment where you’re relying on operational leadership to really grow a business, and that’s yet another reason why Jefferies is so well-positioned in Europe.

Dominic: At the policy level in Europe, there is still a lot of nationalistic thinking and sclerotic behavior. But some existential issues – notably on defense – are spurring a renewed sense of urgency that, over time, can create a more favorable operating environment for European companies. In the meantime, we are seeing a lot more private-sector collaboration, with established companies partnering with startups and startups securing funding.

Europe must also invest significantly in its defense and industrial base. Where will all that money come from? A big part of the answer will be private equity and big infrastructure funds that partner with government and corporate clients to provide the capital needed for a significant build-out of European infrastructure. We are very much on the front end of a durable long-term investment story.

A Framework for Tracking the Energy Transition in 2026

Despite apparent headwinds, global energy transition investment hit a record $2.3trn in 2025, up 8% YoY. Amid this, one of the key challenges for companies and investors is measuring progress. How can one separate headlines from on-the-ground data and get a clear picture of global transition strategy in 2026?

Jefferies’ Sustainability & Transition Team set out to address that question in a new note, Energy Transition Download: Practical Tools to Track Macro, Sector & Companies. The resource aggregates the analytical tools and datasets most useful for understanding the transition and guiding thinking across the investor community.

Kaya Identity: A Framework for Tracking the Energy Transition

One of the clearest frameworks for assessing transition progress is the Kaya Identity, a formula that breaks global emissions into four underlying drivers: population, economic growth, energy efficiency, and the carbon intensity of energy.

As an equation, it reads as follows:

CO₂ emissions = Population × GDP per capita × Energy intensity of GDP × Carbon intensity of energy

In plain English, investors and economists use the formula to clarify why emissions are changing and where progress is coming from. Assessing the global transition through the Kaya framework, we see that:

  • Total carbon emissions have grown more slowly over the past decade, rising roughly 0.3 percent per year, compared with 1.9 percent annual growth previously.
  • The population continues to rise globally, but the pace of growth has slowed and now sits below one percent annually.
  • Economic productivity continues to expand, with global GDP per capita increasing roughly two percent in 2025.
  • Energy intensity—the amount of energy required to generate economic output—continues to decline globally, meaning economies are becoming more energy-efficient. However, the pace of improvement has slowed compared with the decade before the pandemic.
  • The carbon intensity of energy remains the main decarbonization story of the past two decades. Renewable generation continues to expand, gradually shifting energy systems away from coal and other high-emitting fuels.
  • Fossil emissions still grew over the past decade, but at a much slower rate than in earlier periods.

The Kaya framework is equally useful at the country level, where decarbonization pathways differ significantly. For example:

  • China accounts for roughly 30 percent of global emissions.
    • In 2025, emissions were broadly flat, driven by improvements in energy intensity and carbon intensity. Coal emissions were stable, while gas and oil consumption rose modestly.
  • The United States represents roughly 13 percent of global emissions. U.S. emissions increased 1.9 percent year-over-year in 2025, reversing recent declines.
    • The increase was driven primarily by colder weather, higher natural-gas prices—which led to greater coal burn—and rising electricity demand.
  • India accounts for roughly 8 percent of global emissions. Emissions rose 1.4 percent year-over-year in 2025, below historical trends, with coal emissions increasing only modestly.

Following the Capital: Where Transition Investment Is Flowing

Now, it’s worth moving from the macro framework of Kaya toward real-world capital deployment and related market signals. In 2026, how much capital continues to flow into the energy transition, and where?

Last year, global energy-transition investment in the real economy reached approximately $2.3 trillion, with spending concentrated in electrified transport, renewable energy, and grid infrastructure.

  • Electrified transport is now the largest segment of transition investment, with roughly $0.9 trillion deployed in 2025 across electric vehicles and charging infrastructure.
  • Renewable energy attracted around $0.7 trillion, with solar generation leading among sub-sectors.
  • Grid infrastructure continues to see accelerating investment, reaching $0.4 trillion.

Investment trends also vary significantly by region. China saw its first decline in real-economy transition spending since 2013, while both the United States and the European Union recorded increases. Among

major markets, investment growth was strongest in the EU and Japan, rising 43 percent and 18 percent year-over-year, respectively.

Tracking the Transition in 2026

Taken together, these frameworks can provide a clearer picture of how the transition is unfolding against a backdrop of shifting priorities and turbulent global markets. Progress continues on most fronts—but it may be more uneven, and more concentrated in certain countries and sectors, than in recent years.

The Jefferies Sustainability & Transition team tracks these dynamics across more than 800 public companies, alongside private-market activity across the sector. Follow along for more insights.