Private equity cannot get out of the tunnel. For the third year running, the optimism of the beginning of the year has dissolved under the weight of unforeseen shocks: the collapse in software valuations linked to artificial intelligence, tensions in private credit and the surge in oil prices triggered by the conflict in Iran. Taking a snapshot of the situation is Bain & Company’s Global Private Equity Report 2026, which also takes into account transactions in the first period of the second quarter, not just the first three months of the year.
The numbers of stagnation
After a partial recovery in the latter part of 2025, the value of global deal buyouts fell to$173 billion in Q1 2026, with an estimate of only $145 billion for the current quarter, the lowest level since 2023. Volumes also follow the same trajectory, with around 700 transactions expected in the second quarter. A comparison with just twelve months earlier gives the measure of the deterioration: in the first quarter of 2025, the market had peaked at EUR 304 billion. To make the picture even more stark, the so-called ‘deal cost index’ (which combines acquisition multiples with the cost of debt and the median TEV/Ebitda multiple, and which in North America stood at around 10-11 times) reached absolute record levels in the history of the industry, further squeezing expected return margins and raising the bar on the operational value creation required to justify each new acquisition.
“The global buyout market is struggling to take off: after peaking in the latter part of last year, the value of deals fell to USD 173 billion in the first quarter of this year, with an estimate of only USD 145 billion for this quarter – the lowest level since 2023. The number of deals also follows the same downward trajectory, standing at around 700 deals in the second quarter of this year. The situation in Italia mirrors the global dynamic: a lot of activity in the mid-market, an absence of large deals, and a market driven by selectivity rather than risk appetite,’ says Sergio Iardella, senior partner and head of Private Equity Italia at Bain & Company.
The AI paradox: engine and brake at the same time
It is the technology sector that has seen the steepest decline: the value of deal tech has plummeted from USD 118 billion in Q3 2025 to USD 65 billion in Q4, to only US$20 billion in Q1 2026, with an estimated USD 12 billion for the current quarter. There are only two large transactions of more than $1bn in Q2, compared to 15 in Q4 2025. There are no signs of a turnaround any time soon: the confidentiality letter index (NDA), developed by Ontra on a proprietary basis and historically correlated with closings three months in advance, indicates broadly flat activity until at least July 2026.
The technology sector is certainly at the centre of the contradictions of this cycle. Fears about the sustainability of SaaS (Software as a Service) performance caused a correction of almost 30% in February in software market valuations, dragging the value of tech deals down by 70% between Q4 2025 and Q1 2026. Software valuations in private equity portfolios averaged an 8% correction in the first quarter, with Europe holding up better (-4.2%) than the US (-8.9%).