Private Equity Pulse: key takeaways from Q2 2026 | EY - Global

Private equity activity moderated in the first half of 2026, with global PE acquisitions declining 10% year-over-year while aggregate deal value held roughly flat. This apparent softness, however, masks a significant strategic recalibration rather than broad-based retreat. Sponsors maintained selectivity in an uncertain market environment, but the underlying shift reveals a deliberate rotation away from technology-exposed opportunities toward sectors perceived as more resilient to structural disruption.

The most striking divergence emerged in the technology sector, where deal value plummeted 50% compared to H1 2025, contrasting sharply with non-tech sectors that posted 9% growth. This dramatic bifurcation reflects sponsors' elevated scrutiny of software investments in particular, where artificial intelligence adoption is reshaping long-held assumptions around growth trajectories, competitive pricing power, and defensibility. Rather than withdrawing from deployment entirely, PE firms are applying a higher underwriting bar to sectors where disruption risk has intensified, effectively recalibrating capital allocation toward assets demonstrating greater resilience.

Geographic patterns underscored this dynamic, with US-focused deal value declining 25% between H1 2025 and H1 2026. The US market had been the epicenter of large software take-privates in recent years—a category that previously anchored PE deployment activity. As investment committees reassessed opportunities in this space, transaction activity contracted meaningfully in the region. Meanwhile, exit activity remained a stabilizing force, with announced exit value increasing 9% versus the prior year, as trade sales continued to anchor the market and provide liquidity for portfolio companies.

Looking ahead, GP sentiment suggests cautious optimism about a near-term acceleration in activity. Seventy-two percent of general partners expect deployment activity to increase over the next six months, while 56% anticipate exits will meaningfully accelerate. This forward guidance indicates confidence that current market uncertainty will moderate, supported by expectations of firmer asset pricing and improving liquidity conditions. The private equity market thus appears positioned between deliberate tactical restraint today and anticipated acceleration as macro conditions and valuations stabilize.