The 2026 private equity outlook appears hazy, says PitchBook

The UBS Preview Club in Union Square is a red leather couch-mahogany wood place, and as good a spot as any to inhale coffee at 9 AM.

Since moving back to New York, I’ve resolved to cover private equity more (after all, New York is the private equity capital of…everywhere). So, that’s how I landed at the PitchBook’s 2026 Private Equity Outlook event earlier this week. 

And a couple things are really clear: First, that the last couple years in private equity have been complicated, and that heading into this year there’s a lot of “there’s good news, and there’s bad news.” 

The good news: Exits are up, with 2025 coming in as the second-best year for exits ever surpassed only by 2021, according to PitchBook data. That amounts to just over 1,600 exits, and nearly $730 billion in terms of exit value. 

“While it’s a really nice rebound, you really need to see that momentum sustained in the year ahead to make up for that lost time from 2022 through 2024,” said Kyle Walters, PitchBook private equity research analyst. “A lot of sponsors remained on the sidelines, waiting for what they deemed to be a better exit environment, and now it finally seems that that exit environment has arrived.” 

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

In short, though exits are up, there are still too many PE-backed companies that are rapidly maturing—and need to find an exit in order for their backers to raise their next round. (Remember: Unlike venture capital, private equity isn’t a system structured to assume failure—for a small firm, one default may mean you can’t raise again, full stop.)

Some sectors to watch out for, as Ron Kahn, Lincoln International managing director, pointed out include software where “ARR is not materializing” as expected, and energy. Power and energy could see big wins, or losses, he told the audience. 

“People have made big bets on power and energy,” said Kahn. “I don’t know where that’s going to go, but it’s one way or another. It’s probably binary.”

See you tomorrow,

Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@fortune.com
Submit a deal for the Term Sheet newsletter here.

Joey Abrams curated the deals section of today’s newsletter. Subscribe here.

This story was originally featured on Fortune.com