By Pablo Panizza, Rares-Bogdan Rosulescu, Ebba Engen, and Francesca Sveva Composto.
The Shift in Private Equity
Why is Blackstone interested in Justin Bieber songs? Why does KKR care that there has been, and still is, a rising social acceptance of fertility treatments? And how can private equity firms benefit from luxury yacht events and marine shows?
For years, private equity firms have relied on the same playbook: target large companies in established industries, use leverage, cut costs, and scale. But those traditional investment spaces, such as mature consumer brands, manufacturing, and healthcare are getting crowded. With more firms competing for the same kinds of deals, it is becoming more difficult to find good opportunities, and margins are getting tighter. Too much money is chasing too few quality deals.
There has been a strong demand for developing more “creative recipes” on finding and executing PE deals. Now more and more firms, especially smaller funds and family offices, are looking “outside the box”. They are exploring niche and alternative assets that offer something different: less competition, more control, and the chance to invest in sectors with real growth potential.
So, where are investors placing their next bets? Is it in music royalties? Whiskey? The consolidation of marinas? How and why is the private equity landscape starting to shift?
Why Niche Investments Are Gaining Momentum
The private equity landscape has changed. The advantages that once defined the asset class – strong returns, consistent outperformance, and low market correlation – are under pressure. Firms now face mounting challenges: compressed margins, fierce competition for deals, and increasing difficulty in generating value after acquisition.
These challenges are deeply interconnected. Compressed margins are often the result of increasing asset prices, as vast amounts of capital – both from institutional LPs and new entrants like family offices and sovereign wealth funds – chase a limited number of high-quality opportunities. Additionally, the macroeconomic outlook has not favoured PE in recent years. High interest rates made it difficult for the sector to outperform. While 2025 began with optimism – rates declining and forecasts pointing to a rebound – recent market volatility, especially since Trump’s return to office, has cast uncertainty over the investment climate.
What is more, direct investments and operational control represent growing pressures for PE firms as well. There is a growing incentive for different types of funds, ranging from Sovereign Wealth Funds to Pension Funds, to search direct investments in companies, rather than acting as Limited Partners (LPs) for PE acquisitions, due to lower rates of return, higher longer holding periods or to avoid the fee structure. This creates more competition for them, increasing the bargaining for the deals they invest in , which could further reduce margins.
This shift in dynamics has made niche assets increasingly attractive to private equity firms. Firstly, niche assets tend to have a lower correlation with broader markets, providing a hedge against macroeconomic volatility, which would allow PE firms to effectively navigate financial conundrums while also finding better profit margins. Secondly, niche sectors often provide defensibility – meaning they are harder to disrupt due to high entry barriers, regulatory complexity, or asset-specific expertise. Thirdly, these assets frequently open up new growth levers. Unlike mature industries, niche markets often remain fragmented and undercapitalized, allowing private equity investors to consolidate, scale, or professionalize operations in ways that directly create value.
These reasons lay the ground for the following analysis with respect to why the PE firms’ interest in niche assets is growing. There are some clear benefits to successfully implementing a focused niche strategy, but the most important one is that a niche operator should be able to enjoy excellent margins and therefore likely superior long-term returns. In the remainder of the article, we will delve our attention towards several niche industries towards which the PE industry has shifted its attention – marinas and music royalties.
Marinas as a Recession-Resilient Bet
Private equity firms are increasingly seeing marinas as defensible and kind of infrastructure-style assets. On a global level, the marina industry is very fragmented – in fact, there’s over 11,500 marinas just in the U.S., and about 89% are independently owned (IBISWorld, 2024). Because of this fragmentation, there’s a big consolidation opportunity taking shape. Back in 2022, Suntex, which is backed by Centerbridge Partners, merged with Westrec, creating a platform with 55 marinas and more than 20,000 slips (Bison, 2022). And then in 2024, D-Marin picked up seven more sites across Greece, Spain, and Turkey, bringing its total to 26 marinas across 10 countries (D-Marin, 2024).
A lot of this investor interest comes down to predictable cashflows. Most of the revenue in the marina sector comes from slip rentals, which are usually secured with yearly contracts. Preqin (2023) noted that occupancy levels at premium coastal marinas are over 95%. When it comes to broader economic factors, demand here doesn’t really move much – it’s pretty inelastic. Boat owners tend to hang onto their slips for years, mostly because there’s just not that many alternatives. At the same time, slips are hard to add. Environmental rules, zoning laws, and long permitting timelines limit how fast new marinas can get built, especially near cities or protected coastlines (PitchBook, 2023). According to NOAA (2023), in Florida it can take three to five years just to get a permit for a new marina.
Marinas don’t just make money off slip rentals either. These days, a lot of platforms are pulling in up to 30% of EBITDA from extras like restaurants, fuel docks, repair services and even events (CAIA, 2024). MarineMax, which acquired IGY Marinas in 2023, said it made $14 million just from luxury yacht events and marine shows (MarineMax, 2023).
This all fits into private equity’s shift toward infrastructure-style investing. Earlier in 2025, Blackstone bought Safe Harbor Marinas for $5.65 billion through its infrastructure arm, calling the deal a bet on high-occupancy, inflation-protected income (Blackstone, 2025). It paid around 21× forward EBITDA, similar to high-end real estate (Axios, 2025). And as traditional PE strategies face pressure from rising valuations and less cheap debt, these kinds of steady-yielding assets are looking more appealing.
To sum up, marinas are kind of this unique mix of real estate, hospitality and infrastructure, offering strong cash flow, pricing power and room to scale. That is why PE is doubling down.
Other Niche Asset Classes & Broader Outlook
Another investment that has caught the attention of the private equity industry in recent years are music royalties. This is due to their predictable, recurring income and high yields, whcich also remain largely uncorrelated with broader economic activity, as shown during the Covid-19 pandemic, when music spending stayed resilient compared to other industries.
Global recorded music revenues recovered from the piracy era, doubling from $13.1bn in 2014 to $29.6bn in 2024. Although rising interest rates slowed momentum post-pandemic, new rate cuts and better streaming data have renewed investor appetite. Major financial players are entering the sector. HarbourView Equity Partners, backed by Apollo and financed with $500m from KKR, acquired rights to artists like Wiz Khalifa. Litmus Music, backed by Carlyle, purchased Katy Perry’s catalogue for $225m. Meanwhile, Blackstone rebranded its $3bn music investment firm from Hipgnosis to Recognition, now overseeing 45,000 songs including hits by Justin Bieber, Shakira and Fleetwood Mac.
Another sector targeted by private equity is fertility clinics. Strong growth, demographic shifts and broader acceptance of fertility treatments have fueled demand for assisted reproduction. The industry offers high margins and is viewed as resilient in downturns. In this context, KKR acquired Spanish fertility group IVI-RMA, operating over 190 clinics worldwide, for €3bn in 2023. Soon afterwards, it expanded the platform with an add-on acquisition of the Eugin Group for €500m.
Private equity firms are also venturing into the whiskey industry, lured by growth and unique asset appreciation. The “Bourbon Boom” spurred a 249% surge in Bourbon and Tennessee Whiskey revenues from 2003 to 2021. Firms like Cordillera Investment, focusing on niche, non-correlated assets, launched a fund to acquire and age barrels for growing premium spirits demand. However, the market recently slowed, with US whiskey sales dropping 1.2% in 2023, the first decline in two decades. Tariffs pose a further threat, as the EU’s 50% tariff on American whiskey, introduced in response to Trump-era steel tariffs, is set to expire at March’s end.
To conclude, private equity firms are moving beyond traditional deals due to market saturation, intensified competition and rising cost of borrowing capital. Funds have been pivoting towards unconventional markets that can offer higher potential returns, low correlation with the economy performance and predictable cash flow.
Looking ahead, the prospects for these niche sectors will depend on how global economic pressures unfold. Music royalties and fertility services are likely to remain robust, driven by consistent demand and demographic momentum. In contrast, industries like whiskey and marinas may encounter challenges if rising trade tensions and tariffs disrupt exports and impact international consumer spending.
Bibliography
Financial Times, Blackstone ditches Hipgnosis brand and renames $3bn music business ‘Recognition’; ft.com/content/e56a1bf5-e4d7-4977-813f-94787c856836
The Bag, A Review of the Funds in the Music Rights Acquisition Space; thebag.substack.com/p/a-review-of-the-funds-in-the-music
The Wall Street Journal, Music Stocks Adjust to a Slower Tempo; wsj.com/finance/investing/music-stocks-adjust-to-a-slower-tempo-460520cf
Barron’s, Record Deals: Inside the Music Royalty Boom; barrons.com/articles/record-deals-inside-the-music-royalty-boom-01662997890
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Inside Reproductive Health, IVI RMA’s Plans for Boston IVF’s Stern, TRIO’s Condon, brands, staff, after $535M Eugin Sale; https://www.fertilitybridge.com/news-articles/ivi-rma-acquisition-eugin-boston-ivf-trio-plans
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MarineMax. (2023, September 19). MarineMax completes acquisition of IGY Marinas. https://www.marinemax.com
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