DealLawyers.com Blog

According to the most recent edition of EY’s Private Equity Pulse, PE sponsors are optimistic about the environment for many long-delayed exits of portfolio investments in 2026:

Exit momentum also began to reassert itself in 2025, allowing long-deferred liquidity plans to move forward. This was underpinned by the more constructive macro backdrop, improving financing availability and a recovery in buyer confidence, especially amongst corporate acquirors.

Trade sales, which had been broadly flat through 2023 and much of 2024, inflected sharply higher last year. These were the result of significant pent-up strategic demand and greater conviction at the board level to deploy capital.

In aggregate, PE firms announced US$481b of sales to strategics, representing an increase of 26% by volume and more than 75% by value. Activity was particularly pronounced in sectors where scale, technology and operational capabilities were viewed as critical competitive differentiators. Going forward, GPs expect continued strength in the channel, rating it the most important likely exit route for next year.

EY says that secondaries continued to play a big role in exit activities in 2025, and with more than $1.6 trillion in dry powder available for deployment, sponsor-to-sponsor deals are expected to continue to feature prominently in this year’s exits.  While the IPO route has been challenging in recent years, EY points to improving momentum during the second half of 2025 as a potential harbinger of good news for 2026.

– John Jenkins