Key Takeaways
- • Multiples stabilizing at elevated levels: 79% of surveyed GPs expect purchase price multiples to remain flat in 2026 after years of steady increases, signaling that value creation must now come from operational improvements rather than multiple expansion.
- • Valuation gaps remain the primary deal killer: Failure to agree on pricing was cited as the most common reason deals failed to close in 2025, outweighing typical diligence issues and macroeconomic volatility, though the buyer-seller expectation gap has narrowed since the 2022 interest rate shock.
- • Margin expectations modest but stable: Approximately 75% of GPs assume margins will remain stable or improve by up to 300 basis points between purchase and sale on their most recent flagship fund deals, indicating conservative underwriting assumptions.
- • Survey scope and timing: Bain & Company and StepStone Group surveyed 103 investment and investor relations professionals primarily in North America and Europe from December 2025 to January 2026, providing a forward-looking industry snapshot for 2026 dealmaking.
Summary
The private equity industry faces a structural shift in 2026 as multiple expansion—a traditional driver of GP returns—appears to have plateaued at historically elevated levels. According to the inaugural GP Outlook released by Bain & Company and StepStone Group, 79% of surveyed general partners expect purchase price multiples to stabilize rather than continue climbing. This marks a critical inflection point for the sector: without the tailwind of multiple lift that has bolstered returns in recent years, GPs must now rely more heavily on organic margin improvement and operational value creation to achieve target returns.
Pricing disagreements remain the most significant obstacle to deal completion. The survey identified valuation misalignment as the leading cause of failed closures in 2025, surpassing other traditional barriers such as diligence complications and macroeconomic concerns. While the gap between buyer and seller expectations has narrowed considerably since the interest rate shock of 2022, persistent valuation friction continues to disrupt the pipeline and slow transaction velocity.
On the profitability front, GPs are maintaining realistic margin assumptions in their underwriting. Three-quarters of respondents assume that margins on their most recent flagship fund investments will either hold steady or improve modestly—by up to 300 basis points between entry and exit. This conservative positioning reflects the industry's adjustment to a more challenging financing environment and suggests GPs are pricing in continued operational discipline rather than betting on external tailwinds.
The outlook, derived from 103 investment and investor relations professionals across North America and Europe surveyed between December 2025 and January 2026, offers institutional investors and family offices a timely window into how leading buyout operators are positioning their portfolios and capital deployment strategies for the year ahead.
Pricing disagreements remain the most significant obstacle to deal completion. The survey identified valuation misalignment as the leading cause of failed closures in 2025, surpassing other traditional barriers such as diligence complications and macroeconomic concerns. While the gap between buyer and seller expectations has narrowed considerably since the interest rate shock of 2022, persistent valuation friction continues to disrupt the pipeline and slow transaction velocity.
On the profitability front, GPs are maintaining realistic margin assumptions in their underwriting. Three-quarters of respondents assume that margins on their most recent flagship fund investments will either hold steady or improve modestly—by up to 300 basis points between entry and exit. This conservative positioning reflects the industry's adjustment to a more challenging financing environment and suggests GPs are pricing in continued operational discipline rather than betting on external tailwinds.
The outlook, derived from 103 investment and investor relations professionals across North America and Europe surveyed between December 2025 and January 2026, offers institutional investors and family offices a timely window into how leading buyout operators are positioning their portfolios and capital deployment strategies for the year ahead.
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