Pace of private equity exits slows in H1 2026

The number of private equity exits slowed during the first half of 2026, as market uncertainty continued to prevent buyers and sellers from finding common ground on valuations.

Global private equity and venture capital firms announced 1,504 exits between Jan. 1 and June 30, down 6% from the 1,601 exits recorded in the first half of 2025, according to S&P Global Market Intelligence data.

Exit value, however, soared year over year in the first half due to one transaction: Space Exploration Technologies Corp.'s $250 billion acquisition of X.AI LLC in February. The merger of two Elon Musk-controlled businesses was a liquidity event for a group of X.AI's venture capital backers.

But the megadeal could not mask the broader deceleration of exits, which have decreased in two consecutive quarters.

Fund managers are finding ready buyers for top-quality assets, but many other portfolio company investments are in limbo while market participants grapple with the effects of ongoing geopolitical conflicts, trade tensions and the impact of artificial intelligence, all of which are contributing to a buyer-seller divide in M&A processes, said Scott Fisher, a partner at law firm Lowenstein Sandler.

"The absolute value of exits is up, but the number of deals is not up because the markets are still tough for the less-quality assets," Fisher said.

Pressure rising

In the second quarter alone, global exits totaled 688, down 16% from 816 in the first quarter, according to Market Intelligence data. It was the lowest quarterly total for global exits recorded since the first quarter of 2024.

The declining exit numbers add to the pressure fund managers are feeling from limited partners, who in 2025 experienced a fourth consecutive year of record-low distributions from their buyout fund investments, said Alexander De Mol, a consultant in Bain & Co.'s private equity practice. Distributions flow to LPs after an exit, when the fund manager returns a share of profits from the investment.

Low distributions have, in turn, hampered private equity's ability to raise new funds.

"The challenge you're seeing in the fundraising market is directly correlated with the challenge you're seeing in the exit market. If I'm not seeing the money come back, I also can't make new commitments to fund," he said.

De Mol said there are signs of rebuilding momentum in exit markets. Through 2022, 2023 and 2024, global exit value exceeded $150 billion in a quarter just twice. But starting in the fourth quarter of 2024, global exit value exceeded $150 billion for six consecutive quarters before falling sharply in the second quarter of 2026.

"That's where the tension is. Exits are happening and good exits are actually happening, but what the LP community wants to see is a significantly higher level of exits [overall]," De Mol said.

AI questions

Uncertainty around the impact of AI has made the outlook for private equity exits from software investments particularly murky. But AI's impact stretches well beyond software transactions, said Harrison Tull, an associate partner at private equity consultant Jman Group Ltd.

"Everyone needs to at least be able to answer the question around 'How is AI impacting your business?' and 'How are you using it internally?' For those that don't have [the answers], it's going to lead to a lot more questions than you want during a diligence process," Tull said.

– Download a file of raw data from this story. – Catch up on the surge in private equity coinvestment value. – Read about the concentration of private capital in AI funding rounds.

Despite its exposure to AI uncertainty, the information technology sector produced more private equity and venture capital exits than any other sector between Jan. 1 and June 30, according to Market Intelligence data. The IT sector recorded 428 exits, 60% more than industrials, the sector with the next-highest total at 266.

Largest exits

After the SpaceX-X.AI merger, the largest private equity exit announced in the first half was a $10.61 billion transaction that reorganized ownership of parcel locker business InPost SA, making Advent International LP and FedEx Corp. the largest shareholders with a 37% stake each.

The healthcare sector produced five of the 10 largest private equity or venture capital exits in the first half of the year, led by Eli Lilly and Co.'s $7.86 billion acquisition of biopharmaceutical company Centessa Pharmaceuticals PLC from a group of venture capital investors.

Conceding on price

Fisher of Lowenstein Sandler said fund managers are increasingly willing to make concessions on exit deals, accepting that a turbulent macroeconomic backdrop means current portfolio company investments will never achieve hoped-for valuations — at least, not in a timeframe that will satisfy an LP base hungry for distributions.

"If you want to stay in the game, I think you’re going to need to take the money when it’s there," Fisher said.

But there are limits, De Mol of Bain & Co. said, citing a recent survey conducted by the Institutional Limited Partners Association, which indicated that most LPs start to lose confidence in a fund's general partner when a portfolio company's price at exit falls 5% or more below the most recent valuation shared with investors.

"Most GPs are still hesitant to sell at a discount," he said.