PitchBook has indicated that during the first quarter of 2026, the seven major publicly traded alternative investment firms—often called the Big Seven—faced notable market pressures but demonstrated resilience. The researchers at PitchBook have also explained that private equity returns turned negative for the first time since mid-2022, primarily due to valuation adjustments in software holdings amid AI-related concerns. However, underlying portfolio fundamentals remained solid, and strong exit activity helped offset concerns.
The median quarterly gross PE return for these managers stood at -0.7%, marking a sharp reversal from the previous quarter.
Four out of six reporting firms recorded negative marks, driven mainly by multiple compression in tech/software assets rather than operational weaknesses.
In contrast, the S&P 500 declined 4.3% over the same period. Managers like Blackstone stood out with positive results, boosted by energy and infrastructure gains plus successful IPO monetizations such as Medline and Legence.
Apollo reported minimal software exposure, attributing its results more to broader market dynamics.
Private credit showed similar but milder trends. The median quarterly return eased to 0.6%, with trailing 12-month (TTM) figures compressing to 8.9%.
Dispersion was evident: firms with lower software concentration and diversified sub-strategies (e.g., Ares, Carlyle, TPG) maintained stronger performance. Many emphasized conservative underwriting, low non-accrual rates, and equity cushions that limited downside.
KKR’s BDC faced more pronounced challenges from older vintages, prompting mitigation steps like tender offers and fee waivers. Overall, managers viewed the reset as creating selective opportunities with wider spreads and improved deal terms.
PE deployment totaled $28.9 billion in Q1, down 17.8% quarter-over-quarter from a record prior period but up 34.1% year-over-year. TTM deployment reached $105.8 billion.
Activity shifted toward infrastructure, energy, heavy assets, and corporate carve-outs, away from software-heavy sectors. Apollo led with $10 billion deployed, including major take-privates, while Blackstone and TPG also showed strength in datacenters and power-related deals.
Private credit deployment fell more sharply to $126.3 billion (down 32.1% QoQ) as managers adopted a cautious stance amid redemption pressures and portfolio reviews. TTM figures still grew 17% to $609.5 billion, with improving economics in new originations.
Realizations surged to a record $34.6 billion in Q1, driving TTM totals to $97.3 billion. Secondary sales of recent IPOs and premium exits in software-adjacent businesses highlighted healthy liquidity, even as marks compressed.
PitchBook added that fundraising remained robust in certain areas. TTM total capital raised reached $947.9 billion, with credit and perpetual/wealth products leading.
Flagship PE funds advanced at KKR, Blackstone, and TPG.
Perpetual capital strategies, including wealth and insurance channels, proved resilient, with firms like Blackstone, Apollo, and Blue Owl expanding AUM significantly through evergreen vehicles and retail distribution. Insurance platforms continued as a key stable capital source.
Managers are aggressively positioning for AI and digital infrastructure, viewing it as a multi-trillion-dollar opportunity spanning datacenters, power, and energy transition.
PitchBook also indicated that platform expansion into secondaries, GP stakes, and new geographies persists, alongside efforts to diversify beyond traditional buyouts.
Redemption requests in BDCs were largely concentrated among select investors and contained, with strong flows into non-credit wealth products.
While Q2 signals some softening, the overall tone remains opportunistic amid evolving market conditions.
Q1 2026 tested the Big Seven with valuation headwinds but underscored their adaptability through sector rotation, strong exits, and diversified capital bases. PitchBook has concluded in the extensive report that the year ahead will likely hinge on execution in AI-related infrastructure and vintage quality.