2025 was a year of significant growth for 5th Line across three key areas: our team, our capabilities, and our client base.
We added new team members across client delivery, operations, and sales and marketing. This expansion has enabled us to work with and serve a broader range of clients, delivering better results.
Our services capabilities were expanded to include Lender Advisory. This new offering allows us to partner with lenders and the broader ecosystem to help them improve their underwriting, deal development, and increase their win rate. Additionally, we expanded our financial services, offering back-office solutions to existing CFO service providers and companies needing financial infrastructure support.
We also grew our client base, managing more deals and placing more dollars in 2025 year-over-year. Since our inception, we have seen an increase in inbound client inquiries and a larger average deal size, reflecting our growing market presence and reputation for client success.
The Market in 2025
The 2025 market unfolded differently than many had anticipated. Some may view it as a subdued year: the equity markets did not rebound as expected, and the IPO window remained largely closed until later in the year. The reasons for this are varied—from new policies out of Washington to geopolitical factors to the private markets, specifically private credit, which enable companies to remain private and continue growing without the immediate scrutiny of public reporting.
Despite the initial narrative, a common theme emerges when speaking directly with companies, capital providers, and service providers: things are moving along fine. Capital is being deployed and returned. While the market may not be seeing the blockbuster, headline-capturing deals of 2021, activity remains healthy. This has resulted in a balanced mix of optimism and skepticism as we look ahead to 2026.
Outlook for 2026
Looking into 2026, we anticipate several key developments:
Equity Activity: We expect an uptick in equity activity from 2025. While we've expressed this expectation in prior years and seen movement in the right direction, we are not predicting the "banner year" everyone was hoping 2025 would be. An uptick, nonetheless, is positive momentum.
Private Credit Ecosystem: We expect to see increased deal activity, both in terms of deal count and total dollar volume. However, a closer look reveals a more nuanced picture:
Increased Activity at the Extremes: We anticipate seeing more transactions in the less than $50 million range, as lenders writing larger checks diversify their portfolios and mitigate risk with smaller deal sizes. Concurrently, we expect an increase in transactions in the $400 million to $500 million plus range, largely due to existing lenders moving slightly up-market from the $200 million to $300 million range.
A Gap in the Middle: This dynamic will likely create a funding gap in the $100 million to $400 million check size range.
This expected increase in growth-stage and pre-IPO activity suggests that the tail end of 2026 and 2027 will be the long-awaited banner year for equity and exit activity that the market has been hoping for since 2023.
Our Focus
We are optimistic about the market's direction. Service providers, lenders, and companies are all actively determining their optimal position within the ecosystem—whether as an early-stage, growth-stage, or later-stage/pre-IPO player. In an increasingly competitive market, compounded by the integration of artificial intelligence capabilities across all sectors, the focus is on strategic capital deployment and differentiation.
While 2025 had its fluctuations, it ultimately delivered growth and success. As we head into 2026, we are adopting policies, procedures, and practices designed to maintain a sustainable, long-term focus. Our absolute priority remains the client. Whether clients are seeking debt solutions or utilizing our back-office and CFO advisory services, we are committed to ensuring they remain the primary focus of our firm. We believe that by focusing on delivering the best possible experience and end result for every client and partner, our future success is assured.