Investors are taking a different view on risk

The way private equity investors assess risk and growth has changed markedly in recent years. In a roundtable discussion published in Brookz 500, Mark van Rijn (Bolster Investment Partners), Rogier Veerman (MKB Fonds) and Arco de Jonge (Qey Invest) share their views on the current M&A market, investment criteria, and the collaboration between entrepreneurs and investors.

Stricter selection, more thorough analysis

According to the three investors, many acquisition opportunities have fallen through in recent periods. Not due to a lack of interest, but because companies failed to meet increasingly stringent criteria. Stable results, a proven business model and clear growth opportunities are more important than ever.

Rogier Veerman notes that investors are taking a closer look at the quality of growth:
“For stable businesses with defensible revenues and predictable cash flows, we often pay the full consideration upfront. For fast-growing companies, an earn-out structure is more appropriate.”

Mark van Rijn observes that investors approach risk differently than they did a few years ago:
“Investors are still taking risks, but they are now shooting with precision rather than spraying broadly.”
This shift results in deeper due diligence, greater focus on cash flow, and more tailored deal structures.

A buyer’s market and more realistic expectations

According to the participants, the M&A market has normalised. Higher interest rates, economic uncertainty and geopolitical developments have led to more realistic valuation expectations. At the same time, the balance of power has shifted towards buyers.
Van Rijn: “It has become a buyer’s market. Buyers set the terms and are more cautious about risk.”

Arco de Jonge emphasises that this is particularly evident in larger exits: “As an investor, you need to assess carefully who will be able and willing to acquire the company in the future. Exit options are an integral part of the investment decision.”

In his view, deals are more likely to fail when companies have been optimised too far, leaving limited scope for a next owner to create additional value.

Timing and preparation are decisive

A key theme in the discussion is timing — not only when acquiring a business, but also when selling one. Waiting until a company reaches its absolute peak often proves unwise in practice.
“You shouldn’t wait to sell until the company is at its peak,” says Van Rijn.

According to him, anticipating market conditions and recognising momentum are crucial. Veerman adds that the new reality has now settled in:
“Now that expectations have adjusted and interest rates have stabilised, we are seeing movement return to the market.”

Entrepreneurs have become more discerning

Where capital used to be the primary focus, entrepreneurs today are increasingly looking for a partner who actively contributes and adds value. Greater market transparency has accelerated this shift.

Veerman clearly recognises this in conversations with entrepreneurs: “Entrepreneurs have become more discerning: they want a partner who adds value, thinks along with them, and has a clear plan.”

De Jonge sees that entrepreneurs are increasingly opting for structures such as a pre-exit, enabling them to continue building the business together with an investor: “A pre-exit allows the entrepreneur to move the company into the next phase together with a partner and create additional value.”

According to Van Rijn, this also places responsibility on entrepreneurs themselves: “Do your homework before entering into a partnership with an investor. Consider what type of investor they are and speak with other portfolio companies.”

Technology and AI: an accelerator, not a replacement

Artificial intelligence is also discussed. While its impact varies significantly by sector, all three investors primarily see AI as an accelerator. De Jonge describes AI as a structural gamechanger in certain sectors, and Veerman highlights its role in automation and efficiency.

Van Rijn views AI as a practical tool: “It can save us days of work in analysis, but decisions remain a matter of human judgement.”

Outlook: cautious optimism

Looking ahead, the investors expect a stable market with room for well-prepared transactions. Major uncertainties have largely been priced in, but selectivity will remain.

De Jonge does not foresee strong acceleration, but does see healthy underlying momentum in the SME segment. Veerman expects the market to continue recovering. Van Rijn points to differences in investment horizon: “We are not under exit pressure and can continue investing with a long-term focus.”

Read the full article as published in Brookz 500

This article was produced in collaboration with Brookz.