Key Takeaways
- • DACH private equity deal count held near Q2 levels at 78 deals in Q3 2026, down 4% from 81 in Q2, while PE exits rose 29% to 36 from 28 quarter-on-quarter, according to Carlsquare Corporate Finance.
- • Deal value fell to €17.0bn in Q3, but excluding the TK Elevator sale to Kone in Q2, Q3 value was 2.5x the prior two quarters.
- • Exit value dropped from €36.0bn in Q2 to €6.7bn in Q3, though Q3 exit value was more than double Q1 levels.
- • The ECB raised its deposit rate twice by 25bp, in June and September, to 2.50%, a headwind for leveraged financing that Carlsquare expects to dampen Q4 deal activity.
- • Carlsquare sees a widening valuation gap for AI-exposed software businesses and expects compliance with the EU AI Act and data residency rules to increasingly shape software deal structuring.
Summary
Carlsquare Corporate Finance's Q3 2026 review describes DACH private equity as stabilising despite a challenging backdrop. The number of PE deals declined only slightly, from 81 in Q2 to 78 in Q3 (down 4%). Year-to-date, the deal count stands at 237, 8% below 258 deals in YTD 2025 but 2% below 242 in YTD 2024. YTD deal value through Q3 reached €10.1bn more than the comparable 2025 figure, per the report. PE's share of total DACH M&A rose from 9.8% to 12.3% over the period, as total M&A deal count fell from 793 in Q1 to 691 in Q2 and 632 in Q3.
PE exit activity rose sharply, from 28 in Q2 to 36 in Q3. Carlsquare cautions that this may be a tentative signal and must be confirmed in coming quarters. It notes that Q3 2025 also saw an exit peak, driven by a backlog from tariff uncertainty in H1 2025. YTD exits stand at 95 versus 96 in the same period of 2025. Exit value fell from €36.0bn in Q2, which included the €29bn sale of TK Elevator, to €6.7bn in Q3.
Looking to Q4, Carlsquare identifies supportive factors including a recovering sponsor pipeline, a rebound in fundraising, and pressure on sponsors to deploy dry powder and return distributions. Citing Gain's State of Private Equity Fundraising Report, the firm notes that the European share of fundraising rose 6% year on year while the North American share fell 4%. Headwinds include the ECB's rate increases, which were prompted by an energy-driven inflation shock linked to the Middle East conflict and which raise leveraged financing costs given Euribor-linked loan pricing, as well as a widening valuation gap for AI-exposed business models. The ECB held its rate at 2.50% in its October update.
In a software sector interview, Carlsquare Partner Eric Erbeck said DACH software M&A in 2026 was shaped by price discipline, with many sellers anchored to 2021 valuations. He identified vertical SaaS, infrastructure and security software, and mission-critical back-office software as sub-sectors attracting sustained interest, and said buyers should test AI claims against core workflow usage, measurable outcomes, and unit economics. Erbeck also highlighted regulation, including the EU AI Act and data residency rules, as a growing diligence workstream that is affecting deal structuring through specific indemnities, escrows, and purchase price adjustments. Carlsquare's guidance to sellers is to prepare assets early and price them realistically.
PE exit activity rose sharply, from 28 in Q2 to 36 in Q3. Carlsquare cautions that this may be a tentative signal and must be confirmed in coming quarters. It notes that Q3 2025 also saw an exit peak, driven by a backlog from tariff uncertainty in H1 2025. YTD exits stand at 95 versus 96 in the same period of 2025. Exit value fell from €36.0bn in Q2, which included the €29bn sale of TK Elevator, to €6.7bn in Q3.
Looking to Q4, Carlsquare identifies supportive factors including a recovering sponsor pipeline, a rebound in fundraising, and pressure on sponsors to deploy dry powder and return distributions. Citing Gain's State of Private Equity Fundraising Report, the firm notes that the European share of fundraising rose 6% year on year while the North American share fell 4%. Headwinds include the ECB's rate increases, which were prompted by an energy-driven inflation shock linked to the Middle East conflict and which raise leveraged financing costs given Euribor-linked loan pricing, as well as a widening valuation gap for AI-exposed business models. The ECB held its rate at 2.50% in its October update.
In a software sector interview, Carlsquare Partner Eric Erbeck said DACH software M&A in 2026 was shaped by price discipline, with many sellers anchored to 2021 valuations. He identified vertical SaaS, infrastructure and security software, and mission-critical back-office software as sub-sectors attracting sustained interest, and said buyers should test AI claims against core workflow usage, measurable outcomes, and unit economics. Erbeck also highlighted regulation, including the EU AI Act and data residency rules, as a growing diligence workstream that is affecting deal structuring through specific indemnities, escrows, and purchase price adjustments. Carlsquare's guidance to sellers is to prepare assets early and price them realistically.
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