Private equity is entering its next chapter. While overall M&A activity has surprised on the upside, broader sponsor-backed participation has yet to fully emerge. We believe that unlocking middle market deal activity could be the catalyst for the next phase of private equity’s recovery. At the same time, AI is creating new opportunities for operational value creation, while a new generation of private companies is reshaping the late-stage growth landscape.
In our 2026 Mid-Year Outlook, we examine the implications of a higher for longer M&A cycle, where we’re seeing opportunity in late-stage growth investing, and why the middle market remains the most attractive segment within PE.