CFO Slice

Private equity entered 2026 with renewed deal momentum, but liquidity pressures are mounting as firms hold assets longer and struggle to return capital to investors, according to Bain’s Global Private Equity Report 2026. Global buyout deal value rose 44% to $904bn in 2025, while exit value climbed 47% to $717bn, driven by large public-to-private deals and stronger corporate M&A. However, distributions to limited partners have remained below 15% of net asset value for four straight years, leaving roughly $3.8tn in unsold portfolio assets tied up across 32,000 companies worldwide. Average holding periods have stretched to about seven years, up from five to six years in the prior decade. Bain notes that longer ownership cycles are flattening internal rates of return and increasing reliance on operational improvements to drive performance. EBITDA growth has become central to value creation - summarized in the report as “12 is the new 5” - reflecting heightened focus on earnings expansion in a higher-rate environment. Deal activity is increasingly concentrated, with 13 megadeals above $10bn accounting for 69% of growth in deal value, even as overall deal count fell 6%. Sovereign wealth funds and corporate investors played a major role in these large transactions. The report concludes that while lower interest rates and active pipelines could support continued deal flow, liquidity constraints and extended capital cycles will remain defining features of private equity’s next phase.