Key Takeaways
- • JPMorgan global head of M&A Charlie Bouckaert expects private equity sponsors to accelerate exits beginning in the second half of 2027, driven by necessity rather than a dealmaking boom.
- • PitchBook figures reported by the Wall Street Journal put private equity unsold-investment inventory at 33,853 as of Sept. 30, 2026, up from 33,575 at the end of June; at current exit pace, clearing it would take more than eight years.
- • Buyout holding periods have stretched to roughly seven years, versus five to six years between 2010 and 2021, according to Bain.
- • Bouckaert expects overall 2027 M&A activity to resemble the recent slower stretch rather than the robust first two-thirds of 2026, with deal composition skewing toward fewer but larger deals, including AI-related transactions.
- • Continuation funds and secondary sales are expected to be key liquidity routes for sponsors returning capital to LPs.
Summary
JPMorgan's global head of M&A, Charlie Bouckaert, told Fortune that private equity firms may have to begin selling portfolio companies by the second half of 2027. He framed the expected shift as a function of pressure rather than market strength: holdings are aging, refinancing deadlines are approaching, and investors are seeking distributions. "Ultimately, the private equity business model is reliant on exiting and returning capital to LPs," Bouckaert said. "And so that's going to have to happen."
The backlog is large and growing. According to PitchBook figures reported by the Wall Street Journal, private equity unsold-investment inventory reached 33,853 as of Sept. 30, 2026, up from 33,575 at the end of June. PitchBook estimates that at the current pace of exits, it would take more than eight years to clear that inventory. Bain data cited in the article shows buyout holding periods have lengthened to around seven years, compared with five to six years between 2010 and 2021. The industry entered 2026 with roughly 32,000 unsold companies, according to the report.
The current cycle followed a record-setting 2021, a sharp slowdown after aggressive interest rate hikes in 2022 ended the cheap-debt era, and an uneven recovery. Some portfolio companies may need to refinance in 2028 or 2029, forcing sponsors to decide whether to sell or hold and how to finance businesses that remain. "The more imminent nature of that is going to force a more definitive evaluation of what to do next," Bouckaert said.
Bouckaert does not forecast a broader M&A surge. He described 2026 as a "very, very robust environment," particularly through the first two-thirds of the year, before dealmaking slowed. He expects 2027 activity to look more like the recent period. Deal composition is likely to keep skewing toward larger transactions, though with slightly fewer of them, he said, pointing to AI-related M&A.
Exits may not always take the form of outright company sales. Bouckaert said "the exact format in which it happens may change," citing continuation funds and secondary transactions as possible routes. Continuation funds allow sponsors to move assets into a new vehicle they also manage, giving existing investors an opportunity to cash out, while secondary sales let investors sell stakes to new buyers. "But one way or another, we do expect to see greater deal flow materialize there," he said.
The backlog is large and growing. According to PitchBook figures reported by the Wall Street Journal, private equity unsold-investment inventory reached 33,853 as of Sept. 30, 2026, up from 33,575 at the end of June. PitchBook estimates that at the current pace of exits, it would take more than eight years to clear that inventory. Bain data cited in the article shows buyout holding periods have lengthened to around seven years, compared with five to six years between 2010 and 2021. The industry entered 2026 with roughly 32,000 unsold companies, according to the report.
The current cycle followed a record-setting 2021, a sharp slowdown after aggressive interest rate hikes in 2022 ended the cheap-debt era, and an uneven recovery. Some portfolio companies may need to refinance in 2028 or 2029, forcing sponsors to decide whether to sell or hold and how to finance businesses that remain. "The more imminent nature of that is going to force a more definitive evaluation of what to do next," Bouckaert said.
Bouckaert does not forecast a broader M&A surge. He described 2026 as a "very, very robust environment," particularly through the first two-thirds of the year, before dealmaking slowed. He expects 2027 activity to look more like the recent period. Deal composition is likely to keep skewing toward larger transactions, though with slightly fewer of them, he said, pointing to AI-related M&A.
Exits may not always take the form of outright company sales. Bouckaert said "the exact format in which it happens may change," citing continuation funds and secondary transactions as possible routes. Continuation funds allow sponsors to move assets into a new vehicle they also manage, giving existing investors an opportunity to cash out, while secondary sales let investors sell stakes to new buyers. "But one way or another, we do expect to see greater deal flow materialize there," he said.
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