Stephen Catherwood, Managing Director and Co-Head of the Private Equity Group at J.P. Morgan Asset Management, joined Julie Cooling, Founder and CEO of RIA Channel, at iCapital Connect 2026 to discuss the private equity opportunity set and the resilience of the lower middle market.
As companies stay private longer, Catherwood notes that the private market opportunity set has expanded. He explains that more than 85% of U.S. companies generating over $100 million in revenue are privately held, creating attractive opportunities in private equity for investors seeking increased alpha and diversification. While he sees opportunities across all sectors, he identifies healthcare as an area with strong long-term structural growth potential.
Catherwood also points to the lower middle market as a particularly resilient segment within private equity due to its broader investment universe and lower-priced companies, which allow investors to buy with less debt. He explains that professional ownership enables private equity firms to accelerate earnings growth, enhance value at exit, and identify potential merger and acquisition candidates by providing operational and strategic expertise.
Despite recent industry concerns around limited exits, Catherwood notes that the lower middle market has remained active and stable, with continued deal flow, capital deployment, and strong realizations at exit.
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