Key Takeaways
- • Carlyle Group's Steve Wise, Co-Head of Americas Private Equity, signaled strong momentum for private equity dealmaking in the second half of 2026, citing clearance of prior-year headwinds that had constrained activity throughout 2025.
- • Major obstacles to dealmaking—including tariff concerns and economic uncertainty—have dissipated, with economic growth proving resilient and profit margins expanding, creating a more constructive backdrop for M&A activity.
- • The IPO market is beginning to open up with increased investor appetite for higher-quality, larger companies; Carlyle cited the recent LP to Medline IPO as evidence of public market appetite for durable healthcare fundamentals.
- • Equity markets are "in good shape" with demonstrated discernment toward quality assets, positioning the private equity industry for accelerated deal velocity and exit activity in the latter half of 2026.
- • A "meeting of the minds" between buyers and sellers is emerging as valuations realign, suggesting improved transaction dynamics compared to the valuation disconnects that plagued dealmaking in 2025.
Summary
Carlyle Group's private equity leadership anticipates a significant acceleration in dealmaking during the second half of 2026, according to recent commentary from Steve Wise, Co-Head of Americas Private Equity. Wise attributed this optimism to the resolution of multiple headwinds that had constrained transaction activity throughout 2025, describing the prior-year environment as "tricky" but noting that "a lot of the clouds we had in 2025 have parted."
The improved outlook reflects a convergence of positive macroeconomic factors. Tariff-related concerns, which had weighed on investor sentiment and deal sentiment, have largely subsided. Economic growth has remained resilient, and corporate profit margins have expanded, creating more favorable conditions for leveraged buyouts and exit planning. Wise noted that fears around tariff impacts "are behind us" and that "the impacts were not bad." This clearing of uncertainty is reshaping buyer and seller expectations, with Wise observing that there is now "more of a meeting of the minds between buyers and sellers"—a critical dynamic that had deteriorated amid the 2025 valuation disconnects.
The equity markets themselves appear positioned to support private equity activity. According to Wise, equity markets are "in good shape" and demonstrating meaningful selectivity. Investors have shown particular appetite for higher-quality, larger companies with durable business fundamentals. The IPO market, which had been moribund, is beginning to open up, with Carlyle citing the recent LP to Medline IPO as a testament to public market investor appetite for healthcare companies with strong operational characteristics. The market is described as "starved for growth," suggesting limited supply of quality exit opportunities.
Carlyle's co-heads of Americas private equity, including Wise and Brian Bernasek, remain bullish on dealmaking acceleration, with expectations for material exit activity later in 2026. The firm's outlook reflects confidence that valuation realignment—a process that began in late 2025—has progressed sufficiently to enable transactions that satisfy both sponsors seeking exits and strategics and financial buyers seeking entry points at acceptable risk-adjusted returns.
The improved outlook reflects a convergence of positive macroeconomic factors. Tariff-related concerns, which had weighed on investor sentiment and deal sentiment, have largely subsided. Economic growth has remained resilient, and corporate profit margins have expanded, creating more favorable conditions for leveraged buyouts and exit planning. Wise noted that fears around tariff impacts "are behind us" and that "the impacts were not bad." This clearing of uncertainty is reshaping buyer and seller expectations, with Wise observing that there is now "more of a meeting of the minds between buyers and sellers"—a critical dynamic that had deteriorated amid the 2025 valuation disconnects.
The equity markets themselves appear positioned to support private equity activity. According to Wise, equity markets are "in good shape" and demonstrating meaningful selectivity. Investors have shown particular appetite for higher-quality, larger companies with durable business fundamentals. The IPO market, which had been moribund, is beginning to open up, with Carlyle citing the recent LP to Medline IPO as a testament to public market investor appetite for healthcare companies with strong operational characteristics. The market is described as "starved for growth," suggesting limited supply of quality exit opportunities.
Carlyle's co-heads of Americas private equity, including Wise and Brian Bernasek, remain bullish on dealmaking acceleration, with expectations for material exit activity later in 2026. The firm's outlook reflects confidence that valuation realignment—a process that began in late 2025—has progressed sufficiently to enable transactions that satisfy both sponsors seeking exits and strategics and financial buyers seeking entry points at acceptable risk-adjusted returns.
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