Key Takeaways
- • 82% of respondents in BDO's 2026 Private Equity survey expect deal prices to rise over the next 12 months, driven by an overabundance of dry powder chasing too few quality assets.
- • 80% of respondents hold portfolio companies for five years or longer, as firms seek acceptable returns from long-held assets.
- • 94% of respondents say AI is fundamentally reshaping their investment thesis, applied at every stage of the deal lifecycle from sourcing to exit.
- • 41% of firms, a plurality, cite private credit as their primary funding source, while 48% identify talent as their biggest barrier to executing deals at speed.
- • 88% expect take-private transactions to become more attractive over the next year, while 87% expect IPOs to become more attractive.
Summary
BDO's 2026 Private Equity Survey, based on responses from 400 U.S. private equity fund managers, deal partners, and operating partners polled in May 2026, depicts a market in which abundant dry powder is competing for a limited supply of quality assets. According to BDO, 82% of respondents expect deal prices to increase over the next 12 months as a result of this tighter competition, prompting firms to rethink how they differentiate themselves in order to close transactions. Patrick Donoghue, Private Equity National Leader and Managing Principal at BDO, said firms that succeed will be those acting proactively now, reshaping investment strategy around data, investing in growth platforms with staying power, pursuing value-enhancing add-on acquisitions, and developing people able to execute at speed.
Hold periods are lengthening. BDO reports that 80% of respondents hold portfolio companies for five years or longer, as pricing gaps make it harder to achieve acceptable returns on exits. Many firms are broadening their approach to portfolio-company performance in response.
Artificial intelligence is emerging as a central element of deal activity. The survey found that 94% of respondents say AI is fundamentally reshaping their investment thesis, with firms applying it across sourcing, diligence, and exit. BDO notes that firms are approaching sellers with well-defined growth business plans and partnering with management to win transactions.
Financing and talent remain constraints. Forty-one percent of firms, a plurality, list private credit as their primary funding source, reflecting a desire for flexibility amid pricing pressure and the need for speed to close. Meanwhile, 48% of respondents cite finding and retaining the right people at the fund and portfolio-company level as their biggest limitation in executing deals quickly.
Exit and deal-structure outlook is shifting. Eighty-seven percent of respondents expect IPOs to become more attractive over the next 12 months, with much of that interest tied to large, long-anticipated listings. In addition, 88% expect take-private transactions to become more attractive, with BDO noting these offer larger funds with sufficient balance sheets and scale an alternative to hyper-competitive private-to-private auctions.
Hold periods are lengthening. BDO reports that 80% of respondents hold portfolio companies for five years or longer, as pricing gaps make it harder to achieve acceptable returns on exits. Many firms are broadening their approach to portfolio-company performance in response.
Artificial intelligence is emerging as a central element of deal activity. The survey found that 94% of respondents say AI is fundamentally reshaping their investment thesis, with firms applying it across sourcing, diligence, and exit. BDO notes that firms are approaching sellers with well-defined growth business plans and partnering with management to win transactions.
Financing and talent remain constraints. Forty-one percent of firms, a plurality, list private credit as their primary funding source, reflecting a desire for flexibility amid pricing pressure and the need for speed to close. Meanwhile, 48% of respondents cite finding and retaining the right people at the fund and portfolio-company level as their biggest limitation in executing deals quickly.
Exit and deal-structure outlook is shifting. Eighty-seven percent of respondents expect IPOs to become more attractive over the next 12 months, with much of that interest tied to large, long-anticipated listings. In addition, 88% expect take-private transactions to become more attractive, with BDO noting these offer larger funds with sufficient balance sheets and scale an alternative to hyper-competitive private-to-private auctions.
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