Fengate's Jennifer Pereira sees opportunity in the lower mid-market despite macroeconomic headwinds, telling PE Hub that operational improvement remains the primary driver of value creation. Her perspective comes as private equity firms navigate uncertain terrain marked by geopolitical tensions and rising interest rates.

Pereira's comments highlight how the lower mid-market segment has proven resilient when larger buyouts face financing constraints. The focus on operational enhancements rather than financial engineering reflects a shift toward sustainable value building in challenging economic conditions.

Financial services and healthcare have emerged as key sectors for M&A activity in this market segment. These industries offer stable cash flows and defensive characteristics that appeal to investors seeking refuge from volatility. PE Hub's Iris Dorbian reported on these trends through her interview with Pereira.

The emphasis on operational improvement signals that private equity firms are prioritizing long-term business fundamentals over quick flips. This approach suggests the lower mid-market will remain active even as larger deals stall.