Tyler Jayroe
Managing Director
Meena Gandhi
Head of Business Development and Investor Relations for PEG
Published:
In brief:
- Manager and asset selection increasingly shape private equity performance, as wider dispersion and rapid technological change increase the importance of disciplined underwriting and operational execution.
- J.P. Morgan Private Equity Group (PEG) brings more than 45 years1 of experience, a deeply tenured team that has worked together over various market cycles and a consistent focus on the small and middle market,2 where active ownership can matter most.
- Medicus illustrates PEG’s approach in practice: backing businesses that benefit from durable growth trends, operational improvement and the use of technology, including artificial intelligence (AI), to create value beyond the initial investment.
A disciplined process remains the foundation of long-term outcomes
In private equity, the best outcomes rarely come from chasing the latest trade or reacting to short-term market trends. They come from applying a disciplined process consistently over time. That is the foundation of PEG, which has been investing in private equity for more than 45 years.1 With deep institutional experience and an average senior team tenure of 24 years,1 PEG applies a disciplined, bottom-up approach across cycles. PEG focuses on the small and middle market2—an area where access, underwriting discipline and fundamental value creation have a meaningful impact on returns. This part of the market may offer greater opportunities for operational improvement, lower reliance on leverage and a broader set of exit paths.
AI is accelerating change and raising the bar for manager selection
This approach is especially relevant today, as software and other sectors are being revolutionized by technological innovation, particularly AI. Private equity is often characterized by wide dispersion in investment outcomes, but AI is raising the stakes. The chart below shows that results have not been uniform across alternative strategies, reinforcing why manager selection remains central to private equity investing. The question is no longer simply whether to invest in private equity, but how to identify managers who seek to develop and execute resilient value creation plans and generate liquidity after the investment is made. PEG has long focused on partnering with sector specialists who underwrite conservatively, work closely with management teams and build better businesses over time rather than rely on financial engineering. That emphasis on value creation is reflected in PEG’s evergreen approach, where most gains have been generated after closing.3
Operational value creation in the small and middle market
Operational value creation is particularly important in the small and middle market, where many businesses are receiving their first institutional capital and still have meaningful room for growth and improvement. The opportunity ranges from professionalizing management teams and expanding into new geographies to improving systems, pricing and go-to-market execution. Increasingly, it also includes implementing AI to gain efficiency across operations.
AI’s relevance extends beyond the companies building the technology itself. It also lies in how portfolio companies apply AI to improve workflows, sharpen decision making and increase productivity. For many businesses, AI is increasingly becoming less of a point of differentiation and more of a core operating capability.
An example is Medicus Healthcare Solutions.4 PEG co-invested in Medicus alongside BPOC in April 2024. The company is one of the largest national providers of temporary physician and advanced practitioner staffing services, with specialties spanning radiology, anesthesiology, emergency medicine, psychiatry and surgery. Its leading market position reflects both scale and a differentiated service offering. In May 2026, Medicus launched MedicusOne, an enterprise-grade workforce management platform powered by AI that helps hospitals plan, source, schedule, track and pay for temporary staff through a single system instead of managing multiple staffing agencies and spreadsheets. Medicus’ revenue and EBITDA have grown rapidly over the past two years, with outperformance driven by management’s core state strategy and a redefined production model that has increased the number of days booked. This illustrates how AI can strengthen operational efficiency and support more effective business execution within portfolio companies.
Closing perspective: where AI is creating opportunity and why process matters
Beyond applications within portfolio companies, AI is also reshaping where investment opportunities may emerge. Some of the more compelling opportunities may lie in the “picks and shovels” businesses supplying the infrastructure, services and technical capabilities that support continued investment across the AI ecosystem. This is where middle-market specialists can often find attractive assets positioned to benefit from durable demand and operational execution, as AI continues to serve as a tailwind not only for large enterprises but also for smaller businesses that can benefit meaningfully from its thoughtful application.
In a market defined by greater dispersion, elevated expectations and rapid innovation, experience and process matter.