Control remains the standard approach in private equity. However, in recent discussions, majority focused PE investors have expressed a level of flexibility not seen a year ago.

A major B2B software investor stated that while its mandate is still majority control, it is now considering minority shareholdings with control features and near majority structures, assessed on a case by case basis. Growth investors report similar flexibility across primary, secondary, and follow-on deals. White & Case notes that minority stakes are increasing in both the US and Europe for sponsors and strategic investors.

Sponsors that have historically focused on majority holdings are becoming more open to minority positions, especially where the structure offers a route to control over time. Preferred equity, staged acquisitions and options on further shares give buyers downside protection and a path to a larger stake, without requiring the seller to give up control. With exits slow, sponsors are also more selective about where they invest, and in many cases will prefer a minority stake in a strong company to a majority holding on day 1 in a business with lower potential return.

Founders and owners now have greater access to partial liquidity, growth capital that doesn’t require giving up control, and opportunities for staged exits. Holders of minority positions seeking an exit will find the buyer universe now extends well beyond specialist secondary funds.

While control transactions will remain the default, exceptions are increasing. Minority and structured transactions are expected to represent a larger share of European middle market activity through 2027.

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