March 27 2026 | Deals | M&A Advisors | Capital raising
Key Takeaways: 2026 trends and outlooks
- AI is now a fundamental investment filter: Moa Capital applies a three-part test to every new opportunity — will AI disrupt, enhance or leave a business largely unaffected? The answer is shaping which deals get done.
- AI-insulated businesses are commanding attention: Companies whose value proposition cannot be easily replicated or replaced by cheap AI tools are increasingly standing out in a crowded market.
- Deal flow has recovered from early-year uncertainty: Political and trade volatility pulled many transactions in early 2025, but momentum has since rebounded and Boleski expects healthy activity to continue into 2026.
- Smaller deals will dominate: Large-cap firms are pushing into the middle market, while middle-market players are moving further down into the lower middle market — compressing the space and intensifying competition for quality assets.
- Specialisation is the new edge: Firms that focus on specific industries, back platforms decisively and proactively call on targets will be best positioned to win in an increasingly competitive lower middle market.
- AI is reshaping how investors work: From getting up to speed on new sectors to surfacing insights in large datasets, AI is becoming an indispensable tool for dealmakers — and those not using it are already falling behind.
"The concern is with companies whose value proposition is being replaced by AI tools that are cheap to implement and maintain. Conversely, businesses that are insulated from AI are beginning to stand out."
Joe Boleski, Principal at Moa Capital, a Chicago-based lower middle market private equity firm founded in 2018, has spent the past year watching AI move from boardroom talking point to core investment thesis. For Boleski, the question is no longer whether AI matters to deal evaluation — it's how you apply it systematically and at speed. His answer is a deceptively simple filter that is quietly reshaping how Moa approaches every new opportunity.
The three-part AI filter
At the heart of Moa Capital's deal evaluation process is a question that Boleski says cuts through the noise quickly. "At Moa Capital, we apply a simple filter on new opportunities: Will AI disrupt a business, enhance it, or leave it largely alone?" The answer determines where investor attention — and capital — flows.
The businesses attracting the most interest are those that fall into the "enhanced" or "protected against" categories. On the other end of the spectrum, companies whose core value proposition can be replicated by AI tools that are inexpensive to deploy and easy to maintain are drawing scrutiny. "Investors are gravitating toward businesses that fall into the 'enhanced' or 'protected against' categories," Boleski says. "Conversely, businesses that are insulated from AI are beginning to stand out."
He points to one of Moa's own platform companies — a leading provider of pool cues and accessories for billiards enthusiasts — as a concrete illustration. It is a business defined by craftsmanship, brand and community: precisely the kind of asset where AI offers little disruption and, if anything, modest upside.
From uncertainty to recovery
AI isn't the only force that shaped dealmaking in 2025. Political volatility and shifting trade policy created significant headwinds early in the year, pulling a number of transactions before they could reach the finish line. But conditions have since stabilised, and the pipeline has recovered. "I expect the M&A market to push ahead strongly," Boleski says. "Investors will pause or pivot as conditions change, but momentum remains."
That resilience reflects something deeper about the lower middle market: it is less exposed to the macro mood swings that can freeze larger deal processes, and more driven by the fundamentals of individual businesses and the conviction of their sponsors.
A market moving downstream
Looking ahead to 2026, Boleski expects transaction size to continue shifting downward across the market. Large-cap firms are increasingly building out middle market strategies in search of returns, while established middle-market players are moving further down into the lower middle market to find white space. The result is a more competitive landscape at every level — and a premium on differentiation.
For Boleski, that differentiation comes through focus. He expects the firms that perform best in 2026 to be those that commit to specific industries, back platforms with conviction and take a proactive, targeted approach to deal origination — calling on businesses directly rather than waiting for processes to come to them.
AI as an investor's tool
There is a certain symmetry to Boleski's outlook: AI is both a lens for evaluating businesses and an increasingly essential instrument for running a firm. "It helps me get smart on a new space quickly, process vast amounts of data, and surface insights a human eye might miss," he says. For a lower middle market investor operating with lean teams and broad mandates, that capability is not a luxury — it is a competitive necessity. "Private equity firms that aren't using AI this way will be behind. Adoption is only going to accelerate."
