PitchBook says the outlook for private equity in 2026 seems unclear

The UBS Preview Club located in Union Square is a place with red leather couches and mahogany wood, and it’s as good a place as any to enjoy a cup of coffee at 9 in the morning.

Since I moved back to New York, I’ve decided to cover private equity more extensively (after all, New York is the private equity capital across the globe). So, that’s why I attended the PitchBook’s 2026 Private Equity Outlook event earlier this week.

There are a few things that are quite clear: First, the past couple of years in the private equity field have been complex, and as we enter this year, there’s a lot of “good news and bad news” situation.

The good news is that the number of exits has increased. According to PitchBook data, 2025 was the second-best year for exits ever, only surpassed by 2021. That means there were just over 1,600 exits, and the exit value was nearly $730 billion.

“Although it’s a really good rebound, you really need to see this momentum continue in the coming year to make up for the lost time from 2022 to 2024,” said Kyle Walters, a private equity research analyst at PitchBook. “Many sponsors stayed on the sidelines, waiting for what they thought would be a better exit environment, and it finally seems that such an environment has arrived.”

On the other hand, fundraising has decreased. In fact, 2025 was the worst year for capital formation since 2020, Walters told the audience. “We kind of call it the success of a few and the challenges of many,” he said.

In short, even though the number of exits has gone up, there are still too many PE-backed companies that are maturing rapidly and need to find an exit so that their backers can raise the next round of funds. (Remember: Unlike venture capital, private equity is not a system designed to accept failure. For a small firm, one default might mean it can’t raise funds again, period.)

As Ron Kahn, a managing director at Lincoln International, pointed out, some sectors to keep an eye on include software where “ARR isn’t materializing” as expected, and energy. The power and energy sectors could experience either big wins or big losses, he told the audience.

“People have made significant bets on power and energy,” said Kahn. “I don’t know how it will turn out, but it will go one way or the other. It’s probably a binary outcome.”

See you tomorrow,

Allie Garfinkle
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