After several years of compressed deal flow and elongated hold periods, 2026 is shaping up as a meaningful inflection point for private equity exits. The latest IPEM PE Barometer survey of over 1,300 GPs, noted that exit optimism has swung decisively. Some 60% of respondents now view the exit environment positively, up from 44% a year ago and the highest in four years.
The consensus view is that 2026 will finally deliver on the M&A recovery that has been "manana, manana" for the past three years.
2026: The long-awaited exit window finally reopens
GPs are well aware of the need to sell assets via traditional routes - either via IPOs, or by selling to sponsors or trade partnerships - which investors, when push comes to shove, would actually prefer.
They’ve had to be patient, with DPIs having fallen below average.
According to McKinsey's Global Private Equity Report, annual distributions as a share of total buyout assets under management (AUM) hovered around 6%, drastically lower than the historical 14% to 16% average.
What this means in practical terms is that after years of holding assets longer than usual through continuation vehicles and maturity extensions, there is simply a limit to how long that can continue, and deals must come to market.
Firms who are most likely to succeed will be those who have done the preparation and have the confidence to master an increasingly complex exit terrain. Key success factors for exit readiness include: i) clear equity story/value creation plan (72%); ii) management preparation (53%); iii) clean financials and KPIs (41%), and iv) AI/tech roadmap design.
Megadeals have re-emerged, as witnessed last year by Silver Lake’s $55.2 billion acquisition of video game developer Electronic Arts Inc. A total of 22 PE mega deals were recorded, totalling a record $311 billion according to S&P Global.
Nevertheless, the vast majority of volume remains concentrated in the mid-market.
A KPMG M&A Market Report indicates that roughly 95% of PE transactions are falling below the $1 billion mark, with sweet spots ranging from $250 million to $500 million. The report further notes that carve-outs are a key trend that should support M&A activity in 2026, with 71% of private equity investors open to or actively working on such transactions.
A broader exit toolkit: secondaries and continuation vehicles go mainstream
What is becoming increasingly clear is that the exit toolkit is permanently wider than it once, thanks to the continuing maturation of the private equity secondaries market.
Last year was a record year for this space, with PE secondary transaction volumes (for both LP-led and GP-led structures) reaching $226 billion. This was a meaningful increase on 2024, which topped $160 billion and clear evidence that both GPs and LPs were looking for liquidity solutions to support their ongoing investment activities.
Fig 1: Growth of PE Secondaries Since 2013
(Source:https://www.moonfare.com/blog/private-equity-2025-review)
Traditional routes remain dominant, but secondaries now account for around 17% of exit activity, reflecting the continued difficulty of conventional exits and the growing sophistication of alternative routes.
Continuation vehicles sit within this same evolution.
Their evolution has helped to make private markets more efficient overall, providing a structured liquidity pathway for early LPs while allowing GPs to stay with assets they believe in.
The growth of CV activity is borne out by the fact that in 2025, a total of $62.67 billion was raised globally according to Preqin Pro. That is the highest amount since 2017, with a total of 105 continuation funds launched. Nearly $12 billion had been raised as of May 2026.
The supply and demand dynamics therefore continue to remain favourable.
Moreover, the fact that France Invest - the leading professional association for private equity, venture capital, infrastructure, and private debt sectors in France - will begin formally tracking these transactions in 2026 is a further recognition that continuation vehicles have moved firmly into the mainstream.
Liquidity with scrutiny: why exit discipline will define the winners
While the importance of these structures is not in doubt, the broader, forward-looking question is one of governance and scale.
Some institutional investors are sounding a cautious note on secondary market growth. As continuation vehicles grow, there is a real risk that the due diligence applied to these secondary transactions falls short of what a primary investment would demand, potentially putting asset pricing integrity under strain.
This gets to the heart of the issue, which is: What is the primary motivation to launching one of these vehicles? Is the intention simply to mask the fact that some portfolio assets are worth less than the GP believes, and they are unwilling to sell at too low a valuation? Or is it because they truly believe the asset(s) has plenty more upside to tap in to via future acquisition plays or organic growth?
Adam Reilly, national managing partner for mergers, acquisitions and restructuring services at Deloitte & Touche LLP commented on this bifurcation point, stating: "We expect continuation fund activity to remain elevated, but the quality and credibility of the underlying thesis will matter more than ever.”
Others are more bullish on secondaries broadly, pointing to last year’s record volumes and describing them as a "sword and shield" investment; diversified, client-friendly, and well-suited to capturing dislocation.
Together, these perspectives sketch an exit landscape that is becoming more continuous and layered, with liquidity no longer confined to discrete fund-end events — but one where underwriting discipline will increasingly separate the best outcomes from the rest.
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