A new report posits that private equity professionals are increasingly focusing on artificial intelligence as a transformative force, even as they grapple with a stubborn backlog of older portfolio holdings that resist easy exits. PitchBook’s Q2 2026 US PE survey, conducted in May among general partners, limited partners, advisors, and other market participants, reveals a sector pivoting toward future-oriented opportunities while struggling with structural illiquidity from past vintages.
When respondents ranked key macroeconomic influences on their strategies, AI-related disruption and potential ranked highest in first-place votes, narrowly trailing interest rates and geopolitical risks in overall top-three mentions.
Tariffs, once a dominant concern, ranked lowest, indicating a sharp shift in priorities over the past year.
PitchBook pointed out in the research report that this emphasis on AI is reshaping capital deployment.
Respondents reported the largest reductions in software exposure over the prior 12 months, viewing it as vulnerable to AI-driven competitive pressures that erode traditional advantages.
In contrast, they increased allocations to B2B services and energy.
AI concerns have also entered valuation discussions: differing views on AI disruption risk now contribute significantly to buyer-seller price gaps, alongside classic factors like revenue growth assumptions.
Yet enthusiasm for AI does not equate to seamless implementation.
The biggest barriers to broader adoption across portfolios center on practical hurdles—insufficient data infrastructure, unclear return on investment, limited management capacity, and talent shortages.
These challenges underscore that success depends less on conviction and more on rigorous execution and measurable outcomes.
As traditional value drivers like multiple expansion and cheap leverage have diminished, operational enhancements fueled by AI must shoulder greater responsibility for returns.
PitchBook further noted in the research report that liquidity constraints serve as a major counterbalance to this forward momentum.
Exiting existing investments topped priorities for the next six months, outranking new deployments or add-ons.
However, sentiment on exit conditions remains cautious: more participants anticipate deterioration than improvement in the coming half-year, with many expecting stability.
Strategic buyers re-engaging in the middle market emerged as the most hoped-for catalyst, ahead of interest rate reductions or IPO reopenings.
Recent global M&A records, driven by megadeals, have not translated to relief for typical PE holdings.
Middle-market activity lags, with corporate acquirers focusing on large-scale, AI-centric consolidations rather than smaller bolt-ons.
According to the insights from PitchBook, this mismatch leaves sponsors reliant on alternatives like sponsor-to-sponsor deals and continuation vehicles.
Survey data points to lengthening hold periods as a new normal, with most expecting at least five years for fresh investments.
PitchBook also mentioned that continuation funds have surged in popularity as a liquidity tool, evolving from niche solutions to mainstream options—though they spark debate over governance and potential conflicts.
Respondents showed conditional support for related intra-GP transactions, often favoring added oversight.
PitchBook added that the industry finds itself caught between accelerating AI ambitions and delayed realizations from legacy assets.
GPs equipped with fresh capital may capitalize on technological opportunities, while those burdened by 2021-era holdings face prolonged challenges.
Without a meaningful return of corporate buyers to the middle market, reliance on creative liquidity mechanisms will likely intensify through the remainder of 2026 and beyond. The latest research report from PitchBook has now concluded that this particular dynamic now defines today’s private equity landscape. That being, rather bold bets on seemingly high-potential innovation tempered by the weight of unresolved past commitments.