- within Coronavirus (COVID-19) topic(s)
Key Takeaways
- PE deal activity remained robust in Q1 despite being down QoQ, with 5,100 transactions valued at $481.6 billion.
- Exit activity was also down but still healthy, with 975 transactions valued at $306.7 billion.
- Fundraising activity remained soft, with only $86 billion raised in Q1.
Private Equity (PE) entered 2026 amid a backdrop of continued global volatility, but the first quarter showed that the market is still functioning even as significant uncertainty remains. PitchBook has taken a deep dive into the deal, exit, and fundraising activity that defined the PE market in Q1. While the numbers do show a slight pullback from the elevated activity we saw in late 2025, dealmaking and exits are showing resilience.
Deal Activity and Exits Down, but Healthy
Dealmaking remained solid in Q1, with data showing 5,100 transactions in Q1 valued at $481.6 billion. Although this does represent a QoQ decline, it is in comparison to an unusually strong second half of 2025, which ranks as one of the most active on record. Viewed in that context, this seems like less of a slowdown and more of a normalization. It is also important to note that the fundamentals that support deal activity remain intact. PitchBook analysts say $2 trillion in dry powder and lower borrowing costs will continue to buoy deal activity as we move further into 2026.
Exit activity followed a similar pattern in Q1. We saw 975 exits in Q1 valued at $306.7 billion, again down from Q4 but still at what would be considered healthy levels. The fourth quarter of 2025 showed significant exit activity, and even though Q1 did not match that pace, it is still ahead of the stagnant levels of previous years. This points to stabilization. PitchBook suggests that the backlog of aging portfolio companies could also create momentum. Their data shows 11,000 companies that have been held 5+ years, which will be an important driver of future exit activity.
Fundraising Remains a Challenge
One area that continues to face serious headwinds is fundraising. The fundraising environment in Q1 was not as robust as deal and exit activity, following in the footsteps of 2025, which was the weakest for PE fundraising since 2018. There were $86 billion in funds raised in Q1, largely flat with the same period last year. The primary issue is not a lack of investor interest, but a liquidity bottleneck as LPs faced years of stalled exit activity and limited distributions. This has led to reduced capacity for new commitments. In order for this to change, exit activity will need to accelerate in a sustained way.
The PitchBook data paints a picture of a PE market that, while active, is still imbalanced. Deals are getting done and exits are no longer stalled, but we are still waiting on liquidity to be fully cycled back through the system. It also shows that PE is no longer waiting around for perfect conditions, but it is learning how to operate within volatility. If exit activity can be sustained at a level that begins to truly restore liquidity, fundraising will follow, and we will begin to see a more normalized market.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
[View Source]