2026 Global Private Equity Report: How Private Equity is Navigating a New Era of Uncertainty

• Confidence abounds – 94.6% of senior leaders in private equity described themselves as confident in the health and resilience of the sector.
• Secondaries and continuation vehicles have grown into a mainstream and rapidly expanding feature of private markets.
• U.S. deal volume dominates globally, with investors continuing to deploy capital across Europe and Asia.
• AI is transforming valuations across sectors, intensifying pressure to specialize.

• Geopolitical uncertainty shapes market momentum: The first half of 2026 began with momentum, but conflict in the Middle East introduced new uncertainty.
• Global investment trends: While U.S. dealmaking leads in scale, aggregate deal values have softened. Investors are increasingly looking beyond domestic markets, with European valuations and targeted Asian strategies offering compelling alternatives.
• Exit markets remain challenging: Traditional exit routes remain constrained, pushing firms toward creative liquidity solutions and portfolio restructuring to deliver returns.
• Evolving LP/GP dynamics: The relationship between LPs and GPs is under strain, with investors demanding greater accountability and more frequent reporting as distribution timelines extend.
• AI and specialization reshape private equity: Technology-driven disruption is accelerating sector consolidation, as firms without clear domain expertise face increasing pressure to differentiate or partner.
• Resilience under pressure: Despite challenges, the market continues to be resilient. As these structural shifts continue to play out, the market will test how well the private equity sector has adapted and how effectively firms are able to manage risk and translate pressure into performance.

Market Confidence: Our 2025 survey found overwhelming confidence among senior private equity leaders across the UK and Europe, with 94.6% expressing a positive outlook. That sentiment persists in 2026, though it is now tempered by caution. The shift is redirecting global capital flows toward jurisdictions perceived as offering more predictable returns.

U.S. Investment Opportunities: Despite a strong start to the year, dealmaking in the region has become increasingly selective, in part due to AI-induced market volatility and broader geopolitical disruption. Against this backdrop, U.S. investors continue to look outward, deploying capital in Europe and select markets in Asia.

Regulation Drag: The drag effect of regulation identified in our 2025 report has become more pronounced. The result is increasing divergence across regions, with the U.S. combining relative predictability with targeted intervention, Europe experiencing cumulative regulatory friction, and Asia representing a more fragmented and uneven regulatory landscape.

Secondaries and Continuation Vehicles: Once considered niche, continuation vehicles and secondaries are now core components of the private markets toolkit. The U.S. leads in adoption and sophistication, while European and Asian markets are at earlier but accelerating stages of development.

LP/GP Tensions: The fundraising environment remains constrained in 2026, with extended hold periods and delayed distributions intensifying pressure on the LP/GP relationship. Investors are responding by demanding enhanced reporting, clearer alignment mechanisms, and more rigorous performance benchmarks.

A Market in Flux: In 2026, the market remains in a state of flux, as firms adapt to macroeconomic conditions, as well as structural shifts in regulation, liquidity, and technology. In the U.S., these pressures are particularly apparent with similar dynamics being felt across Europe. In Asia, the pace of change varies more significantly by market.

Download the Report

For deeper analysis and regional perspectives, download the full report, Cautious Optimism: How Private Equity is Navigating a New Era of Uncertainty.

To discuss how these trends may affect your portfolio or strategy, get in touch with your relevant contact below.