1. Blackstone: record group results — and a private equity segment back as the firm’s main engine
The group picture. Blackstone (US, NYSE-listed) reported second-quarter results on Thursday 23 July that beat market expectations: distributable earnings up 26% to $2.0 billion ($1.52 per share versus $1.38 expected), net management and advisory fees up 11% to $2.25 billion, and fee-related performance revenues surging 68% to $793 million. Assets under management reached a record $1.35 trillion (+11% year-on-year), on record inflows across institutional, insurance and private wealth channels (private wealth AUM hit a record $324 billion). The striking detail: nine of the firm’s ten best-appreciating positions are linked to artificial intelligence — Schwarzman claims Blackstone is now “one of the largest private capital providers in the AI ecosystem”.
The private equity segment in detail. PE delivered the strongest segment performance in the group: distributable earnings of $981 million, up 31%, or 44.6% of total segment distributable earnings. PE assets under management grew 17% to $454.2 billion and fee-related earnings (FRE) jumped 38% to $717 million. On fund performance: corporate private equity appreciated 3.7% in the quarter and 14.4% over the last twelve months, while infrastructure funds — housed within the segment — posted exceptional returns of 7.2% for the quarter and 28.6% LTM.
PE fundraising and deployment. The segment led the group’s inflows with $24.5 billion in the quarter, including $5.7 billion for the fifth energy transition fund, $5.7 billion in secondaries and $2.8 billion in infrastructure; the third Asian corporate private equity fund closed in Q2 with a further $1.8 billion, bringing its commitments to $13.1 billion. The segment deployed $14.5 billion (including Hologic, Champions Group, Arlington Industries) and committed an additional $5.6 billion (Eurowind Energy, Dresser Utility Solutions). PE accounts for 40.2% of the group’s $228.1 billion of dry powder — roughly $92 billion.
Exits: caution remains. Group net realizations rose 27% to $414 million, but management expects a sequential slowdown in the third quarter before an improvement in late 2026 and 2027, contingent on a stronger IPO market and M&A in the energy transition. A useful reminder: portfolio appreciation (including AI-related gains) rests on unrealised valuations (NAV) — paper gains, not completed exits.
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2. Secondaries: record half-year above $120 billion, driven by single-asset continuation funds
According to data released on 21 July by Evercore, the secondary market exceeded $120 billion in volume in the first half of 2026, up 20% on H1 2025, itself a record. GP-led transactions now account for 53.7% of volume, and single-asset continuation funds alone reached $34 billion: sponsors are extending their hold on “trophy” assets while providing liquidity to their LPs, in the absence of sufficient conventional exits (M&A, IPOs).
Two warning signals within these figures — which remain intermediary estimates: the share of software continuation funds fell by 8 percentage points (concerns over AI disruption and declining listed comparables), and buyers’ capital is running down — dry powder shrank 10% since the start of the year, with a capital overhang multiple close to 1.0x.
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3. France: Mirova to sell its private equity arm to Jolt Capital
Mirova (French, an affiliate of Natixis Investment Managers, Groupe BPCE, unlisted), the sustainable-finance specialist, entered exclusive negotiations on 21 July to sell its private equity business to Jolt Capital, a Paris-based investment firm specialising in European technology growth capital. The team of half a dozen professionals led by Marc Romano would join Jolt Capital, strengthening its impact-investing offering.
The deal illustrates the ongoing consolidation in French private asset management: mid-sized platforms are refocusing their product ranges, while specialised independents seek critical mass.
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4. Divestments: Nestlé sells half its waters business to Platinum Equity — Europe’s carveout wave builds
Nestlé (Swiss, listed on the SIX Swiss Exchange) announced the sale of half of its waters business to Platinum Equity (US, Los Angeles, unlisted), at a valuation of €4.9 billion (about $5.6 billion), handing the group roughly €3 billion in cash. The joint venture, an independent company headquartered in Paris, will span more than 30 brands including S.Pellegrino, Perrier and Nestlé Pure Life. The deal comes three months after the sale of Blue Bottle Coffee to Centurium Capital, as the Swiss group refocuses on its core businesses.
According to PitchBook (article of 23 July), European PE carveouts have generated €41.8 billion in deal value this year through 23 July: at this pace, 2026 would reach €74.8 billion, the third-strongest year on record behind 2019 (€85.3 billion) and 2024 (€79.5 billion). Deal count, however, is lagging badly (417 versus 2025’s record 818): fewer, larger deals. Behind the wave: the higher cost of capital since 2022 is pushing corporates to shed non-core assets, while sponsors find returns built on operational improvement rather than financial engineering (recent examples: TPG/Optum UK at €1.5 billion, Apollo/Forvia Interiors at €1.82 billion).
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5. Record Electronic Arts LBO: Brussels clears the deal, Washington remains the hurdle
On 23 July the European Commission approved, under the EU Merger Regulation, the $55 billion acquisition of Electronic Arts (US, Nasdaq-listed) by the consortium led by Saudi Arabia’s sovereign wealth fund PIF, alongside Silver Lake and Affinity Partners (Jared Kushner’s fund) — the largest leveraged buyout in history. Brussels found no competition concerns.
A reminder of the deal terms, announced on 29 September 2025: $210 per share in cash, a 25% premium to the closing price before the first leaks, for 100% of the publisher of FIFA/EA Sports FC, Battlefield and The Sims. The financing combines roughly $36 billion of equity — including the roll-over of PIF’s existing 9.9% stake — and $20 billion of debt committed by JPMorgan alone (of which $18 billion is to be funded at close) — it is rare for a single bank to carry the entire debt of an LBO of this size. It is the largest all-cash sponsor take-private ever completed.
The remaining hurdle is CFIUS, the US committee screening foreign investment, which has not concluded its review: the deal, initially targeting a close by June 2026, is now running towards a contractual outside date of 28 September 2026. US lawmakers have publicly raised national security questions relating to the data of hundreds of millions of players.
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6. Critical corner: nearly one in ten US private hospitals is now private equity-owned
The Private Equity Stakeholder Project (PESP), an organisation critical of the industry, published on 21 July the 2026 update of its Private Equity Hospital Tracker: 447 US hospitals are owned by private equity firms, or 9.5% of the country’s private hospitals. New in this edition: 30.4% of these hospitals have their real estate owned by listed real estate investment trusts (REITs) — versus 4.7% for all privately-owned hospitals — a sale-leaseback structure that preceded the bankruptcies of Steward Health Care and Prospect Medical.
Apollo Global Management remains the sector’s largest hospital owner with 200 facilities (Lifepoint Health, ScionHealth). On quality of care, PE-owned hospitals show an average CMS rating of 2.5 stars, below national averages. These figures come from an advocacy organisation; they feed an already heated debate in Congress over private equity’s role in healthcare.
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7. Analysis: “Diminishing Returns to Scale” — PE is no longer a homogeneous asset class
In an analyst note published on 17 July, PitchBook (Taylor Criswell and Kyle Walters) argues for a “stratified” reading of private equity: “marquee” buyout funds — the big-name franchises — have become a structurally different product from middle-market buyout. Since 2000, the largest funds have moved from a $3 billion baseline to $5 billion, with many exceeding $10 billion and a few targeting $20 billion or more, while the size of smaller funds has barely changed. A key driver: the public listings of Blackstone, KKR, Apollo and Carlyle turned fee-related earnings (FRE) into a stock-market valuation metric — making AUM growth a standing imperative. A direct echo of the Blackstone results discussed in section 1.
The quantified verdict is harsh on the big names: in recent vintages, the IRRs of the largest managers have consistently underperformed their peers. But there is a trade-off: these funds protect better against tail outcomes — they significantly underperform (more than one standard deviation below the median) less than 5% of the time across 1999-2021 vintages, versus nearly 15% for other US buyout funds (7.6% versus 9.7% for 2015-2021 vintages). The explanation lies in the very nature of these vehicles: broader, more diversified portfolios where no single position can sink the fund; established targets — often market leaders — with proven cash flows, whose value creation rests on revenue growth rather than risky operational transformations; and institutionalised managers with privileged access to financing, even when credit tightens. Middle-market funds, more concentrated and exposed to the execution risk of each portfolio company, show a much wider dispersion of outcomes — in both directions. Value creation also differs: revenue expansion in large-dollar buyouts, operational transformation and margin expansion in the middle market — which enjoys more exit channels but will feel more pressure from higher-for-longer rates. For LPs, the conclusion is clear: allocating to marquee names and to the middle market is no longer the same job.
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PitchBook — Analyst Note “Diminishing Returns to Scale” (17 July 2026) (data as of 30 May 2026, US geography)
References of the week
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Evercore, H1 2026 secondary market data (via PitchBook and Bloomberg, 21 July 2026)
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Blackstone, Q2 2026 earnings release (23 July 2026)
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Private Equity Stakeholder Project, Private Equity Hospital Tracker 2026 (21 July 2026)
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PitchBook, Nestle’s $3bn water deal adds to Europe’s carveout wave (23 July 2026) — carveout data through 23 July 2026
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PitchBook, analyst note “Diminishing Returns to Scale” (Criswell & Walters, 17 July 2026) — data as of 30 May 2026
Figures flagged as estimated or self-reported: secondary market volumes (Evercore intermediary data), Blackstone’s AI-related appreciation (unrealised valuations), the 2026 European carveout projection (€74.8 billion, PitchBook extrapolation at the current pace).
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