When $29 Billion Calls Private Equity Instead of Wall Street

Welcome to this week's Capital Call - your Wednesday dose of private market insights without the jargon. At OneFund, understanding market shifts is crucial for making informed investment decisions.

Pour yourself something nice and dive in. 

🚪 WHO WE ARE We help qualified investors access the same private equity and VC funds that have traditionally been reserved for the ultra-wealthy and institutions. No million-dollar minimums or confusing paperwork. Why should only billionaires get the good stuff?

🧠 THE BIG IDEA

When $29 Billion Calls Private Equity Instead of Wall Street

Meta's decision to seek $29 billion from private capital firms rather than traditional bond markets marks a turning point in how technology giants finance their futures. The social media company's partnership with Apollo, KKR, Brookfield, Carlyle, and PIMCO to fund AI data centers signals that private equity has evolved beyond financial buyer into something approaching a new infrastructure utility for corporate America.

Here's what makes this interesting: $3 billion in equity and $26 billion in debt structured with private markets, with Morgan Stanley orchestrating deals that favor stability over liquidity. Meta sits on $77 billion in cash but chose private capital over traditional corporate bonds. Why? PE firms can offer customized terms, faster execution, and hands-on partnership that investment banks simply can't match.

When hyperscalers bypass public markets for their largest infrastructure investments, it suggests private equity has captured a new category of opportunity that didn't exist five years ago. If private markets become the preferred financing mechanism for infrastructure buildouts, we're witnessing private equity's transformation from a specialist asset class into a pillar of the global economy.

📈 MARKET MOVERS

🏛️ Family Offices Shift from Private Equity to Private Credit
BlackRock reports family offices are becoming more selective with allocations, with a third planning to increase private credit and infrastructure investments in 2025-2026. The shift stems from PE's middling valuations and delays in capital returns. Read the analysis →

📊 SEC to Evaluate Private Equity Use in Retirement Accounts
The SEC will explore PE and alternative investments in 401(k) plans as part of its fiscal 2026 objectives, following Senator Warren's concerns about Empower Retirement's PE offerings to plan participants. View the report →

📊 FTI Survey: M&A Not a Top Priority for PE in 2025
A survey of 500+ PE leaders found M&A ranked last among value creation levers, with only 9% naming it their top priority. AI emerged as the leading strategic focus for 2025. Read the survey findings →

✈️ Bain Delivers Strong Returns Through Virgin Australia IPO
Virgin Australia's A$685 million IPO saw shares surge 11.4% on debut, reducing Bain's stake from 70% to 39.4% in Australia's largest IPO of 2025. View the analysis →

🔍 DEEP DIVE

How Private Equity Became Big Tech's New Bank

Meta's $29 billion private capital raise reveals how private equity has quietly captured a new market: serving as the preferred financing partner for technology infrastructure investments that public markets can't efficiently handle. Think of it this way: when cash-rich companies start choosing PE over Wall Street, something fundamental has shifted.

Why Traditional Finance Failed

Public bond markets have limitations when funding AI infrastructure. They require standardized terms and transparent pricing that don't work for the specific needs of hyperscale data centers. Corporate credit ratings get strained by large capital expenditures, while equity markets punish companies for earnings volatility from multi-year infrastructure buildouts.

Meta's choice reflects these constraints. Despite sitting on $77 billion in cash, the company opted for a private structure that offers flexibility over liquidity. The $26 billion debt component can be structured with asset-backed features, allowing Meta to keep financing off its balance sheet while accessing lower cost of capital. Apollo and KKR bring operational expertise in infrastructure development that investment banks cannot match.

Microsoft's $80 billion AI infrastructure spending increasingly relies on private partnerships, while other tech giants are following similar paths. Data center financing reached $30 billion in 2024 and continues growing rapidly, with private markets capturing expanding share as traditional corporate finance proves inadequate for the scale involved.

The New PE Business Model

This trend shows private equity's evolution from financial buyer to infrastructure utility. Rather than acquiring companies to optimize and exit, firms are becoming long-term capital partners for corporations executing multi-decade technology transformations. The approach generates predictable returns through infrastructure debt while capturing upside through equity stakes in digital assets.

EY research shows PE firms have invested over $100 billion in data center projects in the past three years. Data centers now generate 11.2% returns and have emerged as the most sought-after real estate sector, offering stable cash flows that infrastructure investors prize while participating in AI's growth.

The business model works for both sides: corporations access patient capital with operational expertise, avoiding earnings volatility that public markets penalize; PE firms generate steady infrastructure returns while gaining exposure to technology trends that traditional buyouts can't capture.

The Returns Revolution

For private equity, this infrastructure pivot alters the risk-return profile favorably. Traditional buyouts face increasing competition and compressed multiples. Infrastructure debt offers predictable cash flows with inflation protection, while equity stakes in digital infrastructure provide AI exposure without operational complexity.

McKinsey projects global infrastructure buildout will require approximately $6.5 trillion annually by 2050, driven by AI, energy transition, and demographic growth. Public markets lack the capacity and flexibility to fund investments of this magnitude, creating permanent opportunity for private capital.

Most importantly, this positions private equity at the center of the economy's digital transformation. As corporations increasingly choose private capital for strategic investments, PE firms transform from financial engineers into infrastructure partners, a role that could prove more durable and profitable than traditional buyout strategies.

🧰 TACTICAL TAKEAWAYS

• Target Infrastructure-Focused PE Strategies. Meta's $29 billion private capital raise signals a shift where technology infrastructure becomes a core PE allocation. Focus on managers with digital infrastructure expertise and relationships with hyperscale technology companies.

• Consider Private Credit Exposure to Tech Infrastructure. The Meta deal's $26 billion debt component shows how private credit is becoming the preferred financing for AI infrastructure. Look at funds specializing in asset-backed infrastructure debt.

• Monitor Corporate-to-Private Capital Migration. When cash-rich companies like Meta choose private markets over public bonds, it indicates a shift in corporate financing preferences. Track this trend as it could create sustained demand for private capital solutions.

🧵 WEEKEND READS

(Because some light market analysis pairs wonderfully with Saturday coffee)

• 📈 What's Private Equity Missing Out On? - Datasite and GF Data reveal PE buyers are hanging back despite a middle market revival, with PE deal volumes down 40% year-over-year while overall M&A activity shows cautious optimism. The report explores how uncertainty and tariff concerns have created "sunken confidence" just as deal starts increase 8% and capital becomes cheaper.

• 🏛️ Private Equity Cash Is No Longer King in UK M&A - Bloomberg Opinion examines how KKR and Blackstone are facing unexpected competition from public companies in a UK stock market that used to "roll over" to private equity offers. Two recent deals show British shareholders choosing stock-based combinations with listed companies over all-cash PE buyouts, signaling a shift in takeover dynamics.

• 💰 Crypto IPO: 3 Things You Need To Know About The IPO Season - Forbes analyzes how Circle's successful NYSE debut—shares soaring 600% from $31 to $215—has triggered a crypto IPO wave with Gemini, Kraken, and BitGo preparing public offerings. The analysis suggests 2025 could mark crypto's mainstream acceptance as institutional adoption reaches 86% among investors.

👋 WANT IN?

In these turbulent times, understanding the nuances of private market investments is more crucial than ever. Schedule a discovery call with OneFund further discuss private equity and the current market.

Let's Talk →

The OneFund Team

Capital Call is curated by real humans who actually read the articles we share. Your financial future deserves better than an algorithm.