Inside the PitchBook/PEI Due Diligence Outlook 2025: What It Tells Us About Where PE Diligence Is Heading.

Due Diligence Is No Longer a Compliance Exercise

The consistent theme across the leading PE research houses - PitchBook, PEI, GF Data, and Bain's Global PE Report - captures a fundamental shift in how investors approach the process: moving from standard risk-assessment workstreams towards tailored, value-creation-focused diligence.

Leading middle market funds describe the same evolution. The shift away from standard workstreams towards a more tailored and value-creation-focused approach is the biggest theme in recent years. Due diligence is increasingly understood as an opportunity to deepen understanding and refine the value creation strategy, rather than simply assessing risks.

The implication for technology diligence is direct: cataloguing risks is no longer sufficient. The real value lies in shaping and accelerating the value creation plan from day one. This is precisely what our technology audit is designed to deliver: an assessment that goes beyond risk cataloguing to shape the investment narrative.

Management Diligence: A Growing but Uneven Picture

One of the more provocative areas in recent PE research explores the state of management due diligence. The findings are striking: despite near-universal agreement that management quality is the single biggest factor influencing exit returns, formal MDD remains inconsistent across the industry.

Some firms now commission MDD on every deal. Others still treat it as optional. The assessment from practitioners who work across multiple funds is blunt: management is often the single most important factor influencing returns at exit, yet it is not getting enough systematic attention.

This gap between intention and execution mirrors what we see in technology diligence and IT due diligence. Everyone agrees it matters. Not everyone acts on it early enough.

Data Is Emerging as Its Own Diligence Workstream

Practitioners specializing in data diligence are making a compelling case for separating data diligence from technology diligence entirely. The argument is straightforward: growth plans increasingly rely on data-led automation, analytics, and AI. Technology alone does not deliver that value; the data flowing through those systems does.

This has introduced the concept of "data debt": the backlog of quality, completeness, and connectivity issues sitting in a business's data that slow or block the ability to perform analytics and AI. Nearly every information memorandum now claims some form of AI capability, but testing those claims against the underlying data frequently reveals a different story.

The gap between claimed AI capability and actual data readiness is one of the most consistent findings in middle market technology assessments. AI claims are everywhere. Evidence-based AI maturity is not.

Customer Evidence Is Replacing Top-Down Market Analysis

Commercial due diligence is evolving beyond theoretical market sizing towards direct customer-level evidence. The disconnect is clear: total addressable market analysis shows possibility, but customer-level evidence shows reality.

In an investment landscape where organic growth is harder and multiple expansion is no longer doing the heavy lifting, investors need more detailed insights to build conviction. For many mid-sized businesses, performance is shaped by the behavior of individual customers rather than broad market dynamics.

The same pattern shows up in technology functions. Product decisions in middle market companies are frequently informed by internal assumption rather than actual customer evidence. Weak product processes, often diffused across multiple C-suite executives and driven by sales anecdote rather than structured research, remain one of the most common challenges uncovered during technology and IT due diligence assessments.

Financial Diligence Is Recalibrating for a Different Market

With middle market multiples averaging at some of the lowest levels in recent years, buyers are far more forensic in their examination of revenue quality, margin resilience, and cash generation.

Aggressive EBITDA bridges and optimistic run-rate adjustments that might have been accepted during peak market conditions are now being scrutinized heavily. For technology leaders in portfolio companies, the implication is clear: technology claims in information memoranda need to be backed by operational evidence, not aspirational roadmaps.

Behavioral Signals Are Becoming Part of the Diligence Toolkit

Perhaps the most forward-looking theme in current PE diligence research examines how investors are incorporating behavioral signals into their assessments. Working habits, communication patterns, decision-making cadence, and organizational rhythm are increasingly used to judge transformation readiness.

The essence of this shift: digital transformation projects are not just about technology, they are about different ways of working. You have to take the people with you.

This is a principle we apply in every engagement. Our 5P framework deliberately examines People alongside Platform, Process, Protection, and Product precisely because technology transformation fails without the right leadership dynamics, team structures, and organizational readiness.

Where This Leaves Technology Diligence

Reading the research in full, one theme cuts across every section: investors want operational reality, not presentation decks. Whether the lens is financial, commercial, technological, organizational, or data-focused, the consistent demand is for evidence-based assessment that reveals how a business actually operates, not how management says it operates.

Technology sits at the intersection of all of these workstreams. It underpins the data that financial diligence relies on, the platforms that commercial propositions are built on, the processes that operational efficiency depends on, and the security posture that protects enterprise value. SOC 2 compliance, data governance maturity, and key-person risk in engineering teams have moved from secondary considerations to central deal issues.

That is why the proactive approach we advocate, commissioning independent technology assessments well before a transaction process begins, is not just about avoiding surprises. It is about building a credible, evidence-backed narrative that holds up across every diligence workstream.

The sponsors who get this right gain fewer surprises, tighter alignment between technology capability and commercial messaging, and a clearer route to value realization. Our services for investors are built around exactly this model: independent technology assessment that builds conviction before a transaction process begins.

Related Reading

• Technology Audit, independent technology assessment for PE and VC transactions
• Fractional CTO Services, implementing findings with the assessor who identified them
• The Proactivity Playbook - how proactive audits reshape deal preparation
• For Investors, technology leadership across the investment lifecycle