Real-World Testing of Private Equity: A GP Outlook for 2026

What do general partners expect in the year ahead? Bain andStepStone surveyed investment professionals on multiples, Authors Hugh MacArthur, Chairman of Bain’s Global Private Equity practice; Brenda Rainey, Executive VicePresident of Bain’s Global Private Equity practice; Lindsay Creedon, Partner and Head of Private Equityat StepStone Group; and Aiyu Nicholson, Partner and Private Equity Chief Operating Officer at StepStone Private Equity’s Reality Check: The GP Outlook for 2026 The private equity industry feeds on historical performance data. But at a time when foresight has neverbeen more critical, far less data captures what general partners (GPs) are seeing and planning now, and To close that gap, Bain & Company and StepStone surveyed 103 investment and investor relationsprofessionals, primarily in North America and Europe, from December 2025 to January 2026. We askedhow GPs are approaching 2026: Where are multiples headed? What’s keeping deals from closing? How The GP outlook Here are the top takeaways from GPs’ reflections on multiples, deal-breakers, margin assumptions, Multiples appear to be plateauing—at high levels.After years of steady increases, GPs anticipate thatpurchase price multiples may have finally stabilized. Of the GPs we surveyed, 79% expect multiples tostay roughly where they are. Without the boost from multiple lift, many will have to up their value- Private Equity’s Reality Check: The GP Outlook for 2026 Price is the biggest deal killer.The most common reason deals didn’t close in 2025 was failure to agree onvaluation, according to GPs. While the buyer-seller expectation gap has been narrowing since the interest rateshock of 2022, it still stands out over other roadblocks—including typical diligence issues and macro volatility. Most GPs assume margins will be stable or improve slightly in their current underwriting.For themost recent flagship fund deal they underwrote, around 75% of respondents assume margins will be stableor increase up to 300 basis points (bps) between purchase and sale. As always, the challenge is capturing Private Equity’s Reality Check: The GP Outlook for 2026 GPs believe exit momentum will continue in 2026.Coming off the second-best year for exits ever, GPconfidence is building. In 2026, the majority of GPs expect to complete more exits and rely less on other GPs' expectations for portfolio exits Continuation vehicles GPs report meaningful use of continuation vehicles (CVs). A quarter of GPs have initiated or completeda CV recently. And about 40% expect to explore a CV in the next year or two. Private Equity’s Reality Check: The GP Outlook for 2026 The need to return capital to investors is GPs’ No. 1 reason for doing so. It’s clear that CVs are becomingan established part of the liquidity toolkit. Beyond delivering capital to LPs, many GPs use CVs to The need to return capital to investors is GPs’ No. 1 reasonfor doing so. It’s clear that CVs are becoming an established Management fees and discounts There is downward pressure on the industry’s long-standing 2% headline management fees, particularly asfund size goes up. In addition, fee discounts are frequently offered to support fund-raising efforts, placing Private Equity’s Reality Check: The GP Outlook for 2026 Private Equity’s Reality Check: The GP Outlook for 2026 Typically fee-free, coinvestment is taking an even bigger bite out of fund economics. Coinvestment iswidespread across fund sizes, and it can significantly dilute how much revenue a fund earns from dollarsunder management. For funds that offered coinvestment, the median was 33 cents of coinvestment per LP appetite for coinvestment shows little sign of abating. GPs will increasingly seek to partner with LPsthat can execute reliably and offer a scaled relationship. AI When asked where generative AI is delivering the highest return on investment within the firm, GPs mostoften point to due diligence and deal sourcing. Given AI’s ability to rapidly ingest massive amounts of Private Equity’s Reality Check: The GP Outlook for 2026 Within the portfolio, impact is uneven and still emerging. Reported outcomes skew toward cost savingsand efficiency more than revenue growth. And 39% of GPs don’t expect AI to have any material financialimpact on portfolio companies in 2026. A few even anticipate investment drag, underscoring the Bold ideas. Bold teams. Extraordinary results. Bain & Company is a global consultancy that helps the world’s most ambitious change Across the globe, we work alongside our clients as one team with a shared ambition to achieve extraordinary results,outperform the competition, and redefine industries. We complement our tailored, integrated expertise with a vibrantecosystem of digital innovators to deliver better, faster, and more enduring outcomes. Our 10-year commitment to invest About StepStone Group StepStone (Nasdaq: STEP) is a global private markets investment firm providing customized investment s