Industry Trends
Global private equity deal value climbs 10% YOY in August
Global private equity and venture capital activity strengthened in value but softened in volume in August, according to S&P Global Market Intelligence. Aggregate deal value rose 10% year over year to $58.22 billion from $52.74 billion, even as the number of announced transactions fell to 827 from 927. For the year to date through Aug. 31, 2025, total deal value reached $479.76 billion, up from $450.22 billion in the first eight months of 2024, while deal count declined to 8,327 from 8,810, underscoring a continued tilt toward larger transactions.
Technology, media and telecommunications remained the most active arena in August, with 261 private equity–backed announcements, representing more than a third of monthly deal flow. Application software led the segment with 126 deals, though that tally was down from 170 a year earlier. Semiconductors followed with 22 deals, and systems software with 18.
Mega-deal momentum was notable: fourteen transactions of at least $1 billion were announced. The month’s largest was Thoma Bravo’s agreement to take human capital management software provider Dayforce Inc. private in a deal valuing the company at $12.72 billion. The second-largest saw Blackstone Inc. and Blackstone Energy Transition Partners agree to acquire data and analytics firm Enverus Inc. from Hellman & Friedman and Genstar Capital for $6.5 billion. Blackstone also moved on two additional targets, seeking to take human resource outsourcing company TechnoPro Holdings Inc. private for $3.44 billion and agreeing to acquire electrical maintenance company Shermco Industries Inc. for $1.6 billion. Overall, scale dominated.
Source: S&P Global
Mid-Year Review
Healthcare private equity: Midyear update
Global healthcare buyout activity moderated in the first half of 2026. Disclosed deal value fell below the first half of 2025 even as deal volume edged higher, signalling a shift from the robust momentum seen in late 2025. Activity was weighed down by a confluence of uncertainties, including the AI-driven “SaaSpocalypse,” the war in Iran, and redemption stress in the private credit market.
Regionally, North America stood out with a meaningful rise in buyout value compared to the prior year, despite volumes remaining broadly similar. Europe saw mostly stable volumes but a significant decline in disclosed value. Asia-Pacific activity was roughly unchanged year over year.
Provider-related transactions saw a significant increase in value, propelled by multiple deals across care delivery and healthcare IT/tech services, reflecting a diversified set of theses rather than a single dominant theme. However, the “SaaSpocalypse” muted healthcare IT dealmaking overall: volumes were flat versus the first half of 2025, and value was driven mainly by the Ensemble Health Partners transaction. Investors were cautious about bringing assets to market amid current valuation dynamics, favouring areas with clear transformation theses, particularly tech-enabled services.
Looking ahead to the second half of 2026, ample dry powder and mounting pressure to return capital are expected to support continued activity. Creative structures, especially take-privates, featured prominently and may persist. With revenue growth and multiple expansion no longer sufficient to drive returns, value creation strategies and a clear AI investment posture are increasingly critical in an era where “12 is the new 5.”
Source: Bain & Company
Market Sentiments
1H 2026: Secondary market update
The global private equity secondary market remained highly active in the first half of 2026, demonstrating resilience despite ongoing economic uncertainty and volatile market conditions. According to Campbell Lutyens, transaction volumes were supported by strong demand from investors seeking liquidity, as well as growing participation from a diverse buyer base. The market continued to benefit from structural tailwinds, with institutions increasingly using secondary transactions as a portfolio management tool rather than solely a liquidity solution.
A notable theme during the period was the continued rise of GP-led transactions, which remained a significant driver of activity. These transactions provided sponsors with greater flexibility to manage portfolio assets and offered existing investors additional liquidity options. Traditional LP-led deals also remained robust, supported by healthy pricing levels and sustained buyer interest.
The report highlights that pricing remained relatively stable throughout the period, reflecting improved market confidence and ample capital available for deployment. Secondary funds entered 2026 with substantial dry powder, enabling investors to pursue a wide range of opportunities across buyout, growth equity, venture capital, infrastructure, and private credit portfolios.
Looking ahead, secondary market activity is expected to remain strong as investors continue to navigate portfolio rebalancing needs and seek liquidity solutions amid a slower private equity exit environment. The increasing maturity of the secondary market, combined with rising acceptance of GP-led structures, is expected to support future growth. Overall, the report paints a constructive outlook for the sector, with favorable supply-demand dynamics and strong investor appetite positioning the secondary market as an increasingly important component of the private capital ecosystem. Link to the full report is here.
Source: Campbell Lutyens
Growth funds lead private equity fundraising rebound
Private equity growth funds in the US are experiencing a strong resurgence, attracting a record $33.2 billion in capital during the first half of the year. According to data, this marks the highest first-half fundraising total ever recorded for the strategy and represents a 36% increase compared with the same period a year earlier. The growth also outpaced the broader private equity market, where fundraising across other strategies rose by 20%.
Growth funds typically invest in fast growing businesses without seeking a controlling stake, making them an attractive option for investors looking to gain exposure to high-growth companies while limiting operational involvement. The rebound comes after a difficult fundraising environment in 2023, when higher interest rates, economic uncertainty, and reduced deal activity weighed on investor appetite.
Notably, the increase in capital raised occurred despite a decline in the number of funds in the market. Only 87 growth funds were raising capital in the first half of the year, compared with 96 funds during the same period last year. This suggests that investors are concentrating commitments with established managers and specialist firms that have strong track records and differentiated investment strategies.
A key driver of the renewed momentum has been the surge in interest surrounding artificial intelligence-related companies, which continue to attract significant investor attention. Additionally, valuations for many private growth companies remain below the peak levels reached during the private equity boom of 2021, providing investors with potentially attractive entry points. Together, these factors have helped fuel renewed confidence in the growth equity segment and signal improving sentiment across parts of the private capital market.
Source: Financial Times
Private credit: Redemption pressures ease as regulators steps in
Private credit markets saw mixed signals this week. Apollo Global reported easing investor withdrawal pressure in its non-traded Apollo Debt Solutions (ADS) fund, with redemption requests now about half of the prior window. In June, ADS redeemed the customary maximum 5% of shares after investors sought to withdraw roughly 16.8% of total shares. Apollo CEO Marc Rowan said the firm remains on track to introduce daily pricing by October to improve transparency and expand access to 401(k) and defined contribution channels, as well as individual investors. Elevated withdrawal requests across the sector have been driven by concerns over competition, declining returns, and the potential impact of artificial intelligence on software companies financed by private credit.
Ares Management scaled back a planned €1 billion private credit vehicle to about €400 million after investors challenged valuations of loans being transferred into a continuation fund, seeking larger discounts than Ares would accept, according to the Financial Times. The move follows Ares’ prior efforts to shift loans from a decade-old European direct lending fund into a new vehicle.
Regulatory scrutiny is increasing: the Dallas and New York Federal Reserve banks will launch a pilot survey of the estimated $1.3 trillion private credit market after Q3, segmenting borrowers by size, with findings expected in Q1 2027.
Elsewhere, repurchase requests at Golub Capital Private Credit Fund fell to 4.8% of outstanding common shares, all honored on June 30 NAV, supported by about $4 billion in diversified liquidity. Bridgepoint is exploring a €1 billion private credit secondaries deal. Business development companies showed softness: BCP Investment’s NAV declined on unrealized software mark-to-market losses, and Morgan Stanley Direct Lending Fund’s net investment income dipped due to non-accruals; it repurchased 831,486 shares at an average $15.06.
Source: Reuters
Market Opportunity/Challenges
The next phase of private markets growth
Private markets are entering a more constructive phase as easing macroeconomic uncertainty, improving visibility on inflation and interest rates, and strengthening financing demand create conditions for renewed growth. Private equity activity has remained subdued, particularly in the middle market, but a broader recovery in small and mid-sized transactions is expected as market conditions stabilize. Significant undeployed capital could support increased dealmaking and investment activity over the coming years.
Growth opportunities are also emerging from a new generation of private unicorns, many of which are benefiting from artificial intelligence adoption. These companies are remaining private for longer, allowing a greater share of value creation to occur before an IPO. Investors are increasingly focused on businesses with strong operational performance, durable earnings growth, and the ability to leverage AI to enhance productivity and scale.
Private credit fundamentals have remained resilient despite concerns around redemptions and market sentiment. Default levels are below recent highs, while wider spreads are providing improved compensation for risk. The asset class continues to attract investors seeking stable income, diversification, and attractive risk-adjusted returns in a higher-rate environment.
Demand for flexible capital solutions is expected to rise as a growing volume of private-equity-backed assets approach the end of traditional holding periods. Hybrid financing structures, preferred equity, and other bespoke capital solutions are increasingly being used to address liquidity needs and support portfolio companies. Combined with improving M&A activity and growing financing requirements, these trends point to expanding opportunities across both private equity and private credit.
Source: Morgan Stanley
PE firms turn to flexible capital solutions as LP pressure intensifies
Private equity firms in the UK and Europe are increasingly using minority stake sales, special-situations funds, and hybrid capital to return cash to limited partners amid a difficult exit backdrop, according to White & Case. With conventional exits constrained, minority transactions offer a way to monetize part of a holding while retaining upside, sharing risk over longer holding periods, and setting an external valuation that improves visibility for LPs. Prolonged ownership has also made sponsors more comfortable executing these deals both as sellers and as incoming minority investors.
Demand is rising for flexible capital that sits between debt and equity: structured minority investments, preferred equity, and bespoke financings that combine downside protection with participation in future equity gains. This capital supports acquisitions when traditional financing falls short and provides liquidity and balance sheet flexibility to existing portfolio companies. Ken Barry of White & Case notes the industry is adapting by deploying alternative strategies to release capital, share risk, and support portfolios.
Fundraising pressures amplify the shift. LPs are concentrating commitments with larger, multi-strategy platforms, squeezing smaller managers. Those unable to raise successor funds risk becoming “zombie funds,” managing legacy assets without new capital. Artificial intelligence is central to investment theses and due diligence. AI-driven disruption is influencing valuations across sectors, not just tech. Sponsors are prioritizing companies where AI can drive operational improvement and growth. As AI accelerates, investors are scrutinizing opportunities closely, and flexible capital providers will play a larger role bridging the gap between traditional debt and equity.
Source: Private Equity Wire
The real challenge behind private equity’s data center frenzy
Private equity is flooding U.S. data centers, $45.7 billion in 2025, about 72% of sector investment, drawn by steady cash flows. But signs of froth are emerging: data center debt issuance nearly doubled to roughly $182 billion in 2025; one major manager walked from a $10 billion Michigan deal; and much of the surge traced to a single $40 billion transaction. While headlines chase megawatts, the deeper crisis is liquidity: firms hold roughly 32,000 unsold companies worth $3.8 trillion, average holds have stretched to about seven years, and LP distributions have stayed below 15% of NAV for four straight years: the worst since 2008. Dry powder sits at about $1.3 trillion, aging, and continuation funds have climbed from around 6% of mature-fund distributions (2016–2020) to about 20% (2021–2025), signalling sales aren’t happening. LPs now judge managers by DPI, not paper marks, and tension may spike if data center bets spin into standalone funds, splitting LP priorities and pressuring traditional portfolios.
This turmoil is an operating partner’s opening. Capital is drifting down-market into smaller, hands-on companies that need real operating muscle, not financial engineering. With multiple expansion scarce and exits tight, the only controllable lever is operating performance. Recent exits (2022–2025) show nearly two-thirds of value came from revenue growth. PwC’s 2026 outlook warns LPs are unforgiving of engineering-led playbooks; Bain’s “12 is the new 5” underscores the need for far faster EBITDA growth and real operating systems.
The edge now is unglamorous, repeatable work: fix cash first, know true costs, protect margins, track the few numbers that matter, and re-engage people, turning stalled assets into sellable businesses. Most early problems aren’t balance sheets but morale and founder transitions, changes that take time.
Source: Forbes
Why small and mid-market buyouts continue to outperform
Small and middle market buyouts offer a broad, inefficient opportunity set with compelling structural advantages and multiple exit paths that can translate into attractive long-term returns. In the U.S., companies with $10 million-$300 million in revenue comprise roughly 99,000 businesses, about 95% of privately held firms and nearly 20x the large-cap PE universe supporting better entry dynamics. Purchase prices are lower: since 2010, median acquisition multiples for sub-$1 billion companies have been about 25% below those for $1-$3 billion targets, which themselves are 18% below deals over $3 billion. Lower entry pricing enables less leverage, about 34% less for sub-$1 billion deals, reducing risk and interest costs while freeing cash for growth. Value creation in this segment is driven by operational improvements and add-on acquisitions that enhance scale, diversification, capabilities, and market reach.
Current conditions further favor smaller deals. Higher-for-longer rates and valuation pressures have extended holds (median from five years in 2021 to six in 2025) and constrained distributions (down from 34% of NAV in 2021 to 13% in 2025). Large funds lean more on IPOs; while 2025 IPO exit value rose 42% above the trailing five-year average, volatility persists. By contrast, over 90% of small/mid-market exits are sales to strategics or sponsors, with strategics drawn to digestible targets and specific capability gaps. Robust fundraising at the top end (funds >$5 billion raised over 49% of 2025 capital) supports sponsor-to-sponsor activity; sponsor acquisitions exceeded 35% of exits. Historically, top-quartile buyout funds under $5 billion have outperformed larger peers by ~5% IRR, though dispersion is wider, making manager selection critical. Individual investor access is expanding (e.g., evergreen funds).
Source: J.P. Morgan
