Private equity started 2026 with strong momentum, but fresh market volatility shifted dynamics toward greater selectivity. Investors are now focusing on high-quality, well-structured deals, particularly in asset-heavy sectors like energy, utilities, infrastructure and select real estate, where cash flows are visible and inflation linked. AI-led disruption is reshaping software investment strategies, prompting enhanced diligence and targeted investments in AI-ready companies. Exit markets remain steady, supporting a positive outlook centered on operational value creation. Overall, private equity demonstrates resilience and adaptability amid evolving geopolitical and macroeconomic challenges.

All data contained in this document is sourced from Dealogic and EY analysis unless otherwise noted. For detailed findings, please visit ey.com/pepulse.

Private equity entered 2026 with renewed momentum following a strong rebound in 2025, marked by a 57% rise in deal value and a significant recovery in exits. Strategic buyers and secondaries helped unlock long‑delayed liquidity, while improved macro conditions and stabilized valuations strengthened underwriting confidence. With most GPs expecting increases in both acquisitions and exits over the next six months — and signalling strong conviction in the quality of 2025 vintages — the industry heads into 2026 with clearer visibility, improved fundamentals and growing optimism.

In Q3 2025, private equity activity surged, achieving a record US$310b in deal value as firms capitalized on narrowing valuation gaps and renewed market confidence. With 156 deals announced, including six exceeding US$10b, the sector is pivoting towards larger transactions. Improved financing conditions and creative deal structures are facilitating this momentum. Looking ahead, 61% of firms anticipate increased exit activity, signalling a robust outlook as the market embraces a "risk on" approach, balancing optimism with discipline. All data contained in this document is sourced from Dealogic, PitchBook, and EY analysis unless otherwise noted.

The Dealogic data in this report are under license by ION. ION retains and reserves all rights in such data.