In a recent report, data indicate that US private equity is largely meeting expectations set at the start of 2026. After a strong rebound in 2025 that delivered the second-highest deal and exit volumes on record, activity in the first half of 2026 has remained resilient despite renewed uncertainties around tariffs, artificial intelligence disruption, and geopolitical tensions.
The research report from PitchBook describes a market that is tracking forecasts closely, with sponsors adopting a more cautious yet opportunistic stance.
Fundraising has stayed subdued and is on pace for a third consecutive annual decline, potentially finishing at or below 2025 levels.
Capital continues to concentrate among the largest and most established managers.
Through May 2026, the top 10 funds captured 48.2% of total US commitments, up from 40.3% for all of 2025.
Experienced managers raised 87.3% of capital year-to-date, while first-time funds closed just 18 vehicles totaling roughly $6 billion—trending toward record lows.
This consolidation reflects limited partner preference for proven track records amid an environment of higher selectivity.
Deal activity has remained healthy overall, supported by more than $1.1 trillion in dry powder.
However, platform buyouts have not gained the anticipated market share. Their portion of buyout deals fell to 18.8% through May, short of the 25% threshold previously projected.
Sponsors have shifted toward add-on acquisitions, which accounted for a record 74.7% of buyout volume, and growth equity transactions as they favor smaller, lower-risk deployments amid tighter credit conditions and wider borrowing spreads.
Technology dealmaking has been particularly affected, with IT’s share of platform LBO value dropping sharply to 12.7% from a 2021–2025 average of 30.4%, driven by concerns about AI-driven disruption in software companies.
Exit activity rose 8.2% in 2025 but slowed in early 2026 after a strong fourth quarter.
The backlog of unsold companies grew to 13,325 holdings by the end of the first quarter, equating to more than a 10-year supply at recent exit rates.
Older portfolio companies are exiting more slowly than historical norms. For instance, assets from the 2017 vintage remain held at higher rates than comparable earlier cohorts, while the large 2021 cohort has monetized only 18% of its deals after four years, well below prior patterns.
Continuation funds have provided an important alternative liquidity channel, though global activity through May 2026 fell short of the prior year’s pace.
Macroeconomic factors continue to influence sentiment.
Tariff uncertainty and fears of AI disruption in software have widened valuation gaps between buyers and sellers, while higher financing costs have reduced the pool of potential acquirers.
Some geopolitical risks eased in mid-June, supporting hopes for greater clarity in the second half of the year.
PitchBook analysts expect a measured recovery in dealmaking and exits through the remainder of 2026 as tariff and geopolitical uncertainties resolve and interest-rate cuts potentially reopen IPO windows.
The environment favors disciplined sponsors who can navigate complexity, much like in previous downturns. PitchBook has now concluded that with substantial dry powder available and many assets reaching maturity, the second half of the year could bring improved momentum for those prepared to act selectively.
