GP Outlook for 2026
Multiples
79% of GPs expect purchase price multiples to stabilize at high levels, ending years of steady increases. Value-add strategies will become crucial as multiple lift diminishes.
Deal Breakers
Failure to agree on valuation remains the primary reason for deal closures in 2025, despite narrowing buyer-seller expectations since the 2022 interest rate shock.
Margins
75% of GPs assume margins for their latest flagship fund will remain stable or increase by up to 300 bps between purchase and sale, though capturing value remains challenging.
Exit Momentum
Building on the second-best exit year ever, most GPs expect more exits in 2026 and reduced reliance on secondary transactions. Continuation vehicles (CVs) are increasingly used to return capital to investors.
Continuation Vehicles
- 25% of GPs have initiated or completed CVs recently.
- 40% plan to explore CVs within the next 1-2 years.
- Primary reasons include returning capital to investors and maintaining fundraising support.
Fees and Coinvestment
- Downward pressure on 2% management fees, especially for larger funds.
- Fee discounts are common to support fundraising.
- Coinvestment, widespread across fund sizes, dilutes revenue per dollar under management (median: 33 cents of coinvestment per dollar under management).
- LP appetite for coinvestment remains strong, pushing GPs to seek reliable partners.
AI Adoption
- Highest ROI in due diligence and deal sourcing.
- Uneven impact on portfolio companies, with 39% of GPs expecting no material financial impact in 2026. Some anticipate investment drag.
