Global private equity exit volume falls 17.4% in Q3 as valuation gap persists - S&P Global

Global private equity and venture capital exit volume fell 17.4% year over year in the third quarter of 2026, declining to 724 transactions from 876, according to S&P Global Market Intelligence data. Quarter over quarter, exit volume fell 4.1% from 755. Total exit value stood at $227.17 billion, up 5.4% year over year but down 1.8% from the prior quarter. For the first nine months ended Sept. 30, total exit volume was 2,304, down 6.0% from 2,452 a year earlier, while exit value rose 55.6% to $918.39 billion from $590.10 billion.

Brendon Parry, head of private markets at TIFF Investment Management, said the valuation gap between buyers and sellers remains the core bottleneck for exits. He added that disagreement extends to the durability of target company earnings, particularly in software. Louis Lehot, a partner at Foley & Lardner LLP, said AI tools such as Claude Cowork and Claude Code are prompting investors to reassess the future of some software-as-a-service companies, and that buyers are fewer for businesses that are not genuinely AI-first. Buyers are increasingly favoring companies with lower exposure to AI-driven obsolescence, including businesses in information technology and industrials.

Information technology and industrials recorded the most exits in the first nine months, with 668 and 410 transactions respectively. Peter White, principal at GenNx360 Capital Partners, said buyers are seeking certainty, stability and growth. IT services tied to AI implementation, cloud computing and cybersecurity are attracting interest, as are testing, inspection and maintenance businesses that generate recurring revenue with lower capital intensity.

Buyer interest in AI was evident among the largest exits through Sept. 30, led by the $250 billion sale of X.AI LLC to Space Exploration Technologies Corp., with a selling group including Sequoia Capital Operations LLC, Lightspeed Management Co. LLC, Valor Management LLC and StepStone Group Inc. NVIDIA Corp. also acquired Hugging Face Inc. from an investor group including Intel Capital Corp., Qualcomm Ventures LLC, Lux Capital Management LLC and Betaworks Ventures Management LLC. Both were completed as trade sales.

Trade sales remain the preferred route, accounting for 75.7% of Q3 exit volume. Charlie Newman, managing director at Protiviti UK, said corporate strategic buyers can realize synergies that financial sponsors cannot, supporting higher valuations and offering greater execution certainty. General partner-led secondary sales rose to 160 from 149 quarter over quarter, and IPOs rose to 16 from 14. Year over year, IPO exits increased from 13. Alan Goldfarb, managing partner at Orangewood Partners LLC, noted that IPO exits remain concentrated among very large companies and are less accessible to middle-market businesses. Parry said fundraising is slowing meaningfully, and pressure to return capital should encourage more pragmatic selling decisions.