The State of Global Private Equity in 2026: Capital, Competition, and Value Creation

Private equity has never been short of capital. What has changed in recent years is the competition for quality opportunities and the expectations placed on investors to deliver real operational value.

Globally, private equity assets under management continue to grow. Institutional investors remain attracted to the asset class, seeking returns that outperform public markets and hedge inflationary environments. Dry powder remains high across North America, Europe, and increasingly Asia-Pacific. Yet capital abundance has created a paradox: money is plentiful, but truly differentiated deals are harder to secure.

This has intensified competition at every stage of the investment cycle — sourcing, acquisition, value creation, and exit.

From Financial Engineering to Operational Excellence

A decade ago, leverage and multiple expansion played a significant role in generating returns. Today, higher interest rates and more cautious debt markets have curtailed easy leverage. At the same time, valuation multiples remain elevated in many sectors. This combination has pushed private equity firms to focus sharply on operational value creation.

Improving revenue growth, building scalable leadership teams, investing in technology, professionalising governance, and strengthening commercial capabilities have become the real drivers of outperformance. In short, value is increasingly created after the deal, not during it.

This has profound implications for how private equity firms operate. Many have expanded operating partner teams, built in-house transformation capabilities, and formed deeper partnerships with external specialists. The best-performing firms now behave as active owners, not financial sponsors.

Sector Focus and Thematic Investing

Another defining trend is the move toward sector specialisation. Generalist investment models are giving way to deep sector expertise, allowing firms to spot trends earlier, add sharper insight at board level, and build networks of relevant executives and advisors.

Technology, healthcare, business services, and infrastructure continue to attract global capital. Meanwhile, sectors facing disruption — such as traditional manufacturing, logistics, and consumer goods — present opportunities for those capable of driving transformation.

For portfolio companies, this sector focus means investors arrive with clearer theses, stronger networks, and higher expectations from day one.

Longer Hold Periods, Higher Expectations

Holding periods have extended in many markets as exit windows fluctuate and IPO markets remain selective. Longer ownership demands sustained leadership performance and strategic continuity. This is driving increased attention to management depth, succession planning, and leadership resilience inside portfolio companies.

The global private equity market is also becoming more transparent. Limited partners expect more detailed reporting, clearer ESG strategies, and evidence of governance maturity. Portfolio leadership teams are now accountable not only for financial performance, but for culture, sustainability, and reputational risk.

Talent as a Differentiator

Perhaps the most underappreciated shift is the role of talent strategy as a competitive edge. In a market where capital is abundant, access to high-performing executives has become a genuine differentiator. The ability to identify, attract, and assess leadership talent quickly post-acquisition can materially impact returns.

This is why executive search, leadership assessment, and succession planning are now embedded earlier in the investment lifecycle — not just reactive activities when a gap appears.

Looking Ahead

Global private equity remains a growth industry. But success increasingly belongs to firms that combine capital with capability — operational expertise, sector insight, leadership strategy, and disciplined execution.

For portfolio companies, the message is clear: expectations are rising. Professionalisation, leadership quality, and strategic agility are no longer optional — they are core to value creation.

Key takeaway:

In today’s private equity market, capital opens the door — but leadership and operational excellence determine who walks through it successfully.