Global Private Equity Factbook – Q3 2026

Global private equity activity in Q3 2026 was marked by fewer transactions but stronger capital deployment, as sponsors concentrated investment in larger, high-conviction opportunities. Macroeconomic and geopolitical uncertainty, including tensions in the Middle East and concerns around the Strait of Hormuz, continued to weigh on transaction execution. Nevertheless, rising average deal sizes, stronger exit activity, and a sharp improvement in fundraising pointed to renewed momentum in capital deployment and liquidity, even as the recovery remained selective.

Global PE deal volume declined approximately 17% quarter-over-quarter (QoQ), with 1,750 deals completed in Q3 2026 compared with 2,116 in Q2. Transaction volume was also approximately 22% below Q3 2025 levels, reflecting greater caution around valuations, financing conditions, and downside risks. PIPE transactions continued to dominate deal flow, accounting for nearly 65% of transactions. Buyouts and growth investments represented approximately 18% and 15% of the total transactions, respectively, as sponsors maintained a disciplined approach to underwriting and capital allocation.

Capital deployment strengthened despite lower transaction volumes. Global PE investment rose approximately 21% QoQ to USD 785bn from USD 647bn, while average deal size increased approximately 47% to USD 449mn from USD 306mn. Large transactions, including Electronic Arts (USD 55bn) and Aligned Data Centers (USD 40bn), underscored the sponsors' willingness to commit capital to high-conviction opportunities. Investment in the first nine months of 2026 reached approximately USD 2.0tn, already around 10% above the USD 1.82tn deployed during full-year 2025.

Investment trends diverged across regions. North America attracted USD 279bn, up approximately 34% QoQ, while Asia-Pacific investment rose 42% to USD 142bn. Europe moved in the opposite direction, with capital invested declining approximately 35% to USD 88bn. Latin America and the Middle East and North Africa (MENA) both recorded growth of approximately 41%, albeit from smaller bases.

Sector allocation remained concentrated in Information Technology, Financial Services, and Healthcare, which attracted the most capital among transactions with sector-level information. Materials, however, recorded the highest deal count, at 413.

Information Technology emerged as the leading sector by capital deployed. Investment more than doubled to approximately USD 154bn from USD 74bn in Q2, even as deal count fell to 244 from 267. Software accounted for approximately 57% of sector investment, followed by IT services at 32%. North America captured 72% of deployment, reflecting the influence of the quarter's large US transactions.

Financial Services investment increased to approximately USD 111bn from USD 60bn in Q2, despite a decline in deal volume. Asia-Pacific accounted for approximately 51% of deployment, while commercial banks represented 37% of sector investment. Major PIPE transactions in Agricultural Bank of China (USD 23.8bn) and Industrial and Commercial Bank of China (USD 14.9bn) illustrated the scale of banking-related investment.

Healthcare investment remained relatively resilient, declining to approximately USD 53bn from USD 58bn in Q2, while deal count fell approximately 17% to 225. Pharmaceuticals and biotechnology accounted for nearly half of sector investment, and North America captured approximately 72%. Transactions involving PANTHERx Rare (USD 7bn) and Integer Holdings (USD 5.7bn) demonstrated continued interest in larger healthcare assets.

The private equity exit environment improved during the quarter. Exit activity increased approximately 19% QoQ to 401 transactions from 336 in Q2 and was approximately 8% above Q3 2025 levels. Mergers and acquisitions remained the leading exit route, accounting for 163 exits, or approximately 41% of the total. Secondary buyouts and IPOs represented approximately 21% and 19% of the exits, respectively, indicating broader liquidity options as sponsors continued to focus on returning capital to limited partners.

Fundraising momentum strengthened significantly. Global PE firms raised approximately USD 229bn in Q3 2026, up 46% QoQ and more than double the amount secured in Q3 2025, marking the strongest fundraising quarter in the period reviewed. However, the recovery remained selective, with commitments concentrated among established managers with strong track records, consistent distributions, and differentiated strategies. Smaller and emerging managers continued to face a more challenging fundraising environment.

Dry powder continued to decline. Global uncalled capital stood at approximately USD 384bn as of June 2026, down 46% from USD 710bn in Q1, reflecting sustained deployment and earlier fundraising constraints.

Looking ahead, stronger fundraising and improving exits provide grounds for a cautiously constructive outlook for the final quarter of 2026. However, lower deal volumes and persistent macroeconomic and geopolitical uncertainty suggest that the recovery will remain selective. IT, Financial Services, and Healthcare are likely to remain important investment themes, with software, commercial banking, and pharmaceuticals and biotechnology among the key areas of capital concentration. Strategic acquisitions should remain important to sponsor liquidity, while successful fundraising and disciplined underwriting will be critical to sustaining investment activity.

This edition of the Global Private Equity Factbook examines global investment activity, regional and sector trends, exits, fundraising, and dry powder. Together, the findings show that Q3 2026 was defined by larger transactions and improving liquidity rather than a broad-based recovery in deal volumes. Capital continued to flow toward scaled assets and experienced managers, reinforcing the importance of selectivity and clear sector conviction in an uncertain investment environment.