1. European Private Equity in Q3: volumes fall, nearly half of deal value involves a US sponsor — and fundraising concentrates in fewer than a hundred funds
PitchBook published its quarterly report on European Private Equity (“Q3 2026 European PE Breakdown”) on October 5: deal value fell 10.9% quarter over quarter to €149.15 billion — a figure that includes PitchBook’s estimates for deals not yet recorded — and deal count fell 4.4% to 2,253. The report names the European Central Bank’s two rate increases, in June and September, as the primary cause. The detail is more telling than the total: of the €123.5 billion actually recorded to date (excluding estimates), €56.5 billion, or 45.7%, came from deals with US investor participation; nine of the quarter’s ten largest deals featured a US sponsor, and sixteen exceeded €1 billion. PitchBook’s analysts note that these very large deals were priced before the September hike, and expect that resilience to fade in the fourth quarter.
Fundraising tells the same story of concentration. In the first nine months of 2026, European Private Equity funds raised €65.9 billion, equal to 77.6% of the 2025 full-year total, but across only 99 funds, or 56.9% of the 2025 count (PitchBook, October 9); the median size of funds closed reached €360 million, up from €275 million in 2025; managers that have already raised at least four funds took 88.5% of the capital, while first-time funds raised just €1.5 billion across seven vehicles, the lowest in the series. PitchBook ties this selectivity to distributions, which have fallen in recent years below 20% of net asset value, against a ten-year average of 27%.
No competing data on the European third quarter had been released when this edition closed: the figures above are proprietary PitchBook data, uncorroborated at this stage. The only available cross-check covers a different scope: Invest Europe, the European private capital association, recalled on October 8 — launching its “Quiet Power 2026” campaign aimed at North American, Middle Eastern and Asian institutions — that European buyout funds raised €103 billion over the full year 2025 (+33%), almost 30% of it from North American investors, and that European buyouts returned 14.73% annually over thirty years to the end of 2025, compared with 13% for North American funds; the page specifies neither the source of these performance figures nor whether they are net returns. American capital therefore holds both ends of the European market: nearly half of the deal value recorded in the third quarter, and almost 30% of buyout fund commitments.
Sources: PitchBook (Q3 2026 European PE Breakdown), PitchBook (US investors prop up European PE), PitchBook (median European PE fund size), Invest Europe (Quiet Power 2026)
📖 Going further: “28. Transaction Value 2025: what the new Invest Europe report really shows”
2. Continuation funds: managers ask for more than 20% carried interest — as the market contracts and the vast majority of original investors choose to exit
In a continuation fund, the manager transfers portfolio companies into a new vehicle that it continues to manage, and the original investors choose to cash out or to roll over. Carried interest — the share of the gains that goes to the manager — is usually tiered there, between 12% and 20%. On October 7, Bloomberg documented the rise of “super carry”, meaning a rate above 20%: according to PJT Partners, a New York-listed US investment bank that advises on many secondary transactions, 29% of single-asset continuation funds that closed in the first half of 2026 included one, almost triple the share a year earlier. The practice is not unique to these vehicles — the US manager Accel-KKR already applies it to its primary funds — but this is where it is negotiated deal by deal. The premium is conditional: buyers may require a 30% IRR, a multiple of at least three times invested capital, or both, before it is triggered. Two cases show where the line falls: the US manager Parthenon Capital raised more than $1.7 billion for the vehicle holding the rating agency Kroll Bond Rating Agency, after several investors balked and HarbourVest agreed; the venture capital firm Lightspeed proposed 25% on a $600 million multi-asset continuation fund, which lead buyer Coller EQT rejected.
This escalation comes in a shrinking market. PitchBook counts 95 continuation funds in the United States for $47.4 billion (including estimates) over the period ending September 30, 2026, against 161 deals and more than $97.6 billion in the record year 2025; its analyst explains that the vehicle no longer serves as an “overflow valve” now that traditional exits are recovering. As for the original investors, two measures exist and do not agree: the bank Jefferies has the average rollover rate rising from 11% in 2023 to 15% in 2025, whereas an NBER working paper (November 2025, “Selling to Yourself: Continuation Funds in Private Equity”) sees it falling from 14-15% in 2018-2019 to below 5% in 2025, and to 2% for public pension funds in 2024 — the gap comes down to methods and samples. The reasons investors give (PitchBook, October 9) are consistent: an exit price often below the value carried on the manager’s books, a manager sitting on both sides of the transaction, and too short a decision window — 20 business days under the guidance of ILPA, the international association of fund investors, which has proposed since June to extend it to 30. Whichever measure is used, at least 85% of original investors prefer to cash out rather than roll over: the terms of the new vehicle, super carry included, are therefore negotiated with the secondary buyers who take their place.
Sources: Bloomberg, republished by Advisor Perspectives, PitchBook (continuation fund market), PitchBook (LP rollover rates)
📖 Going further: “29. What is a continuation fund, and why is it so successful?”
3. Follow-up — venture capital in Q3: record amounts, fewer and fewer recipients, on both sides of the Atlantic
The K shape described here in week 39 shows up in all three quarterly reviews released this week. In the United States, the Venture Monitor from PitchBook and the NVCA (the US venture capital association), published on October 8, puts the amount invested in the first nine months of 2026 at $515.8 billion, about 44% above 2021’s full-year record; artificial intelligence captures 82.7% of it. The concentration also applies to managers: firms on at least their fourth fund account for 88.2% of the capital raised since January, the highest share in the series, and Andreessen Horowitz alone, with $23.8 billion, for more than 20% of the total. Exits are not keeping pace: only eighteen venture-backed companies went public in the United States in the third quarter, most of them healthcare companies, while the report counts 992 unicorns still private, worth a combined $5.7 trillion; PitchBook writes that SpaceX’s record $1.7 trillion IPO “has not reopened the window”; the software companies Airtable and Miro were sold for $1.3 billion and $1.4 billion, discounts of nearly 90% to their 2021-2022 valuations. Crunchbase, a US database independent of PitchBook, reaches the same reading with a different method (announced rounds, rather than closed deals with estimates): $159 billion invested worldwide in the third quarter, down 25% from the second but up 53% year over year, including 27 rounds of at least $1 billion — a record — that absorbed about a third of the capital.
In Europe, Crunchbase counts $25 billion in the third quarter (+77% year over year), the strongest quarter in four years; artificial intelligence accounts for 75% of it, the highest share on record, and four rounds of more than $1 billion represent close to 40% of the total. In France, the EY venture capital barometer, published on October 7, reports €8.7 billion raised as of September 30, 2026 (+57% year over year), already more than the €7.4 billion of full-year 2025, but across 397 deals against 428 a year earlier (−7%). Ten rounds of more than €100 million total €5.4 billion, or 62% of the amounts; Mistral AI’s round (€3 billion) alone represents more than a third, and EY notes that without it, nine-month growth would be “barely 3%”. Below the €100 million threshold, amounts fall 6% to €3.3 billion and deal count falls 9% to 387. EY’s conclusion holds for all three scopes: “Capital is abundant but is directed toward an ever smaller number of companies.”
Sources: PitchBook-NVCA (Q3 2026 Venture Monitor), Crunchbase (global, Q3 2026), Crunchbase (Europe, Q3 2026), EY (French venture capital barometer, in French)
📖 Going further: “30. VC vs. Buyout: The American Match in Five Rounds”
4. Investor liquidity: record co-investments, funds now modeled to last fifteen years — and a listed Private Equity vehicle that votes its own wind-down
Three facts from the week describe how investors are adapting to funds that return money more slowly. The first is the rise of co-investment, meaning an LP’s direct investment in a company alongside the fund, generally with no management fee or carried interest: according to S&P Global Market Intelligence, cited by the Financial Times and reported by Private Equity Wire on October 9, its value reached a record $198 billion in the first half of 2026, more than double the year-earlier level, while Private Equity fundraising rose only 5% to $312 billion (S&P’s scope, distinct from the PitchBook scope cited here last week). Pennsylvania’s Public School Employees’ Retirement System, PSERS ($86 billion in assets), estimates that its co-investments outperform the rest of its Private Equity portfolio by 5 to 6 percentage points; CalPERS, the California public employees’ pension fund, by contrast saw its own underperform in most periods over the three decades to 2022, before a recovery in the following three years — the risk cited being adverse selection, with the manager offering co-investors less attractive deals than those it keeps for its funds.
The second fact relates to a revision of assumptions. At the Greenwich Economic Forum (October 5-7), the US consultant NEPC, an adviser to pension funds and endowments, said it had extended fund lives in its pacing model in late 2025: 15 years for a buyout fund, 17 years for a venture capital fund, 16 years for a fund of funds; PitchBook recalls that at the end of 2025, about 40% of the net asset value of US PE-backed companies had been held for more than seven years. NEPC draws a practical consequence: funds that last longer leave investors with less capacity to commit to the next ones, and its chief investment officer, Sarah Samuels, advises them in that case to reduce the size of their commitments rather than skip a fund — “Don’t try to time vintage years, and don’t skip funds.” The third is a vote: on October 7, the shareholders of Partners Group Private Equity Limited — a Guernsey investment company listed in London since 2007 and managed by the Swiss manager Partners Group, itself listed in Zurich — approved by 99.89% the orderly realization of the entire portfolio, after holders of more than 40% of the shares had asked to exit; realization proceeds will be returned to them from March 31, 2027, on a semi-annual basis. According to the specialist newsletter The Secondary Brief, the shares traded on the eve of the vote about 40% below net asset value per share (a figure not verified in the company’s documents). In all three cases, the investor is making the same calculation: pay lower fees, wait longer, or exit at a discount.
Sources: Private Equity Wire (co-investments, citing the Financial Times and S&P Global), PitchBook (Greenwich Economic Forum), Partners Group Private Equity Limited (results of the general meeting), The Secondary Brief
📖 Going further: “11. Les fonds de pension et les Universités, piliers du financement du Private Equity” (in French)
5. Individual investors: the SEC proposes to open private funds more widely — and managers are already looking for ways to let holders out
The Securities and Exchange Commission (SEC), the US markets regulator, issued two proposed rules and a request for comment on September 30, which law firms analyzed this week. The first proposal amends Rule 205-3, which restricts to “qualified clients” the possibility of being charged a performance fee: any accredited investor would become a qualified client, and the current thresholds — $1.4 million in assets under the adviser’s management or $2.7 million in net worth — would be removed. Registered funds and BDCs (business development companies, regulated investment companies that finance private businesses) could charge a performance fee of up to 20% of net gains, realized or unrealized, under the oversight of their board. The second proposal loosens the rules for interval funds, closed-end funds that commit to periodically repurchasing a fraction of their shares: a monthly repurchase interval would be added to the quarterly, semi-annual and annual options, and a new fund could defer its first repurchase offer for up to two years. These are proposals; comments are due 60 days after publication in the Federal Register.
At the same time, two manager initiatives show that the exit question already arises. Hamilton Lane, a Nasdaq-listed US manager, asked the SEC on October 7 for permission to create an exchange-traded share class for five of its evergreen funds (open-ended funds with periodic subscriptions and repurchases) — the largest of which, Private Assets Fund, reported $6.46 billion in net assets as of June 30, 2026: today, a holder can exit only at quarterly repurchases at net asset value; the filing, as cited by The Secondary Brief, states that the listing “will enhance shareholder liquidity”, with sellers accepting a discount in return. In Europe, Amundi (a French asset manager listed in Paris, with close to €2.6 trillion in assets as of June 30, 2026) and the UK manager ICG, listed in London, launched on October 6 their first jointly developed fund for wealth clients, Amundi ICG Global Private Equity Secondaries: an evergreen secondaries fund with monthly subscriptions and quarterly redemptions “subject to certain important limitations”, which the press release does not detail. All three texts run into the same question: at what price, and how quickly, an individual can exit a fund whose assets cannot be sold within a quarter.
Sources: Mayer Brown (SEC proposals), SEC, The Secondary Brief (Hamilton Lane), Amundi (press release)
📖 Going further: “12. Le Private Equity s’ouvre (vraiment) aux particuliers” (in French)
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