Global Private Equity Factbook – Q2 2026

Global private equity activity moderated during Q2 2026 as sponsors adopted a more disciplined approach to capital deployment amid continued geopolitical uncertainty, tighter financing conditions, and persistent valuation gaps. Following the exceptionally strong investment activity recorded in Q1 2026, transaction execution slowed modestly as buyers remained selective and focused on assets with clear value-creation opportunities. Despite the sequential slowdown, deal activity remained higher than the corresponding period last year, underscoring the resilience of the private equity market and the availability of attractive investment opportunities.

Global PE deal volume declined approximately 4% quarter-over-quarter (QoQ), with 1,978 deals completed in Q2 2026 compared with 2,057 deals in Q1 2026. However, transaction volume remained approximately 8% higher than Q2 2025, reflecting a resilient deal pipeline despite a more cautious investment environment. PIPE transactions continued to dominate deal activity, accounting for nearly 70% of total transactions, highlighting sponsors' preference for structured minority investments in publicly listed companies. Buyouts and growth investments also remained important contributors, although firms continued to emphasize disciplined underwriting and greater selectivity in deploying capital.

Capital deployment eased during the quarter following the elevated investment levels seen in Q1. Global PE capital invested declined by 13% QoQ. Average deal size also eased to USD 318 Mn from USD 349 Mn, indicating fewer large-ticket transactions compared with the previous quarter. Nevertheless, large buyouts continued to underpin overall investment activity, with transactions involving MGX, Sumisho Air Lease, Hologic, Alphabet, and Clearwater Analytics among the quarter's largest deals. This demonstrated that sponsors remained willing to commit significant capital to high-conviction opportunities.

From a geographic perspective, investment activity softened across most major regions. North America recorded the steepest sequential decline in capital deployment, followed by Asia-Pacific and Europe, reflecting slower execution of large transactions and continued financing discipline. In contrast, capital invested in the Middle East and North Africa increased significantly, primarily driven by the landmark investment in MGX, while Latin America also recorded notable growth from a relatively small base.

Sector allocation remained concentrated in industries supported by long-term structural trends. Financial Services, Healthcare, and Information Technology collectively accounted for roughly two-thirds of total capital invested during Q2 2026.

Financial Services emerged as the largest sector by capital deployed, supported by increased investment in asset management platforms, insurance businesses, and AI-focused investment vehicles, including the USD 50 Bn MGX transaction.

Healthcare investment accelerated significantly during the quarter, with capital deployment increasing approximately 56% QoQ, driven by large buyouts in medical devices, pharmaceuticals, and healthcare services.

Information Technology remained an important investment theme despite a sharp moderation in capital deployed following an exceptionally strong first quarter. Investment activity continued to focus on software, AI-enabled platforms, semiconductor businesses, communications infrastructure, and enterprise technology solutions.

The private equity exit environment remained challenging during the quarter. Exit activity declined modestly to 329 transactions in Q2 2026 from 356 in Q1 2026, reflecting continued selectivity among buyers and a gradual recovery in liquidity markets. Strategic mergers and acquisitions remained the dominant exit route, accounting for approximately 46% of all exits, while sponsor-to-sponsor transactions and IPOs continued to recover gradually.

Fundraising showed encouraging signs of recovery during Q2 after a subdued start to the year. Global private equity firms raised USD 137 Bn during the quarter, representing a 57% increase over Q1 2026. However, fundraising remained concentrated among established managers with strong track records, differentiated investment strategies, and proven distributions, while emerging managers continued to face a more competitive fundraising environment. Although fundraising momentum improved, commitments during the first half of 2026 remained below prior-year levels, indicating that limited partners continue to exercise caution in capital allocation.

Dry powder remained under pressure as capital deployment continued to outpace fundraising. Global uncalled capital stood at approximately USD 498 Bn as of Q1 2026, reflecting the drawdown of available capital by sponsors. The decline reinforces the importance of a sustained fundraising recovery to replenish deployable capital. This is particularly relevant as private equity firms continue to manage extended holding periods and a large inventory of unrealized portfolio companies awaiting more favorable exit conditions.

Looking ahead, the outlook for the remainder of 2026 remains cautiously constructive. Improving fundraising activity, resilient deal pipelines, and stabilizing financing markets should continue to support investment activity, although sponsors are expected to remain disciplined in valuation and underwriting. Financial Services, Healthcare, and AI-enabled technology businesses are likely to remain key investment themes. Strategic acquisitions are expected to remain the leading exit route until IPO markets recover more meaningfully. The market continues to favor scaled managers with sector expertise, operational value-creation capabilities, and sufficient dry powder to capitalize on large, high-quality investment opportunities.

This edition of the Global Private Equity Factbook provides a comprehensive overview of these developments, covering global investment activity, exits, fundraising, dry powder, regional trends, and sector dynamics. Together, these insights show that Q2 2026 was characterized by a measured normalization in private equity activity following an exceptionally strong first quarter. While overall investment volumes moderated, the market remained resilient, with capital continuing to flow toward high-quality assets, structurally attractive sectors, and experienced managers capable of navigating an increasingly selective investment environment.