Key Takeaways
- • Private equity remains actively committed to technology sector investments despite a documented downward trend in technology fundraising figures globally.
- • The private equity market processed over 9,000 transactions valued at $1.2 trillion in 2025, signaling substantial recovery from post-pandemic liquidity constraints.
- • PE firms currently hold approximately 32,000 unsold companies worth $3.8 trillion combined, with $717 billion in exits completed throughout 2025, indicating a significant portfolio overhang.
- • Fundraising activity remained subdued through late 2025, with only $507 billion raised by the third quarter, constraining deal deployment capacity despite strong historical transaction volumes.
- • High-profile acquisitions such as Leonard Green & Partners' majority stake purchase in Crunch Fitness from TPG Growth exemplify continued M&A activity in consumer and growth-oriented sectors.
Summary
Private equity continues to demonstrate resilience in M&A activity despite macroeconomic headwinds affecting capital formation. The sector processed over 9,000 transactions totaling $1.2 trillion in 2025, representing a substantial rebound from the post-pandemic liquidity crunch that characterized the prior investment cycle. This recovery underscores institutional appetite for buyout and growth equity strategies, even as certain market segments face constraints.
However, the fundraising environment remains constrained relative to historical peaks. Through the third quarter of 2025, PE managers globally raised only $507 billion, well below pre-pandemic norms. This capital formation lag creates a mismatch between deal execution capacity and portfolio holdings. PE firms currently sit on approximately 32,000 unsold companies valued at $3.8 trillion in aggregate, despite achieving $717 billion in exits throughout 2025. This substantial portfolio overhang suggests that exit velocity remains insufficient to absorb accumulated dry powder and existing portfolio companies.
Notably, private equity managers maintain strategic commitment to the technology sector despite documented declines in technology-focused fundraising. This positioning reflects conviction in secular growth trends and suggests that PE capital allocation prioritizes sector fundamentals over fundraising momentum. Recent transactions such as Leonard Green & Partners' acquisition of a majority stake in Crunch Fitness from TPG Growth illustrate continued M&A activity across consumer and growth equity segments, demonstrating that dealmaking persists across multiple subsectors.
The 2026 market outlook appears hinge on accelerating M&A volumes and improving exit conditions. The combination of substantial dry powder, a massive unsold portfolio base, and softer fundraising conditions creates structural pressure for PE firms to execute exits and recycle capital. Success in achieving normalized exit volumes will determine whether the sector sustains current transaction momentum or faces renewed headwinds.
However, the fundraising environment remains constrained relative to historical peaks. Through the third quarter of 2025, PE managers globally raised only $507 billion, well below pre-pandemic norms. This capital formation lag creates a mismatch between deal execution capacity and portfolio holdings. PE firms currently sit on approximately 32,000 unsold companies valued at $3.8 trillion in aggregate, despite achieving $717 billion in exits throughout 2025. This substantial portfolio overhang suggests that exit velocity remains insufficient to absorb accumulated dry powder and existing portfolio companies.
Notably, private equity managers maintain strategic commitment to the technology sector despite documented declines in technology-focused fundraising. This positioning reflects conviction in secular growth trends and suggests that PE capital allocation prioritizes sector fundamentals over fundraising momentum. Recent transactions such as Leonard Green & Partners' acquisition of a majority stake in Crunch Fitness from TPG Growth illustrate continued M&A activity across consumer and growth equity segments, demonstrating that dealmaking persists across multiple subsectors.
The 2026 market outlook appears hinge on accelerating M&A volumes and improving exit conditions. The combination of substantial dry powder, a massive unsold portfolio base, and softer fundraising conditions creates structural pressure for PE firms to execute exits and recycle capital. Success in achieving normalized exit volumes will determine whether the sector sustains current transaction momentum or faces renewed headwinds.
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