Week 44 · 26 October–1 November 2026
Exits are picking up in value, but liquidity has yet to be proven: defence, carve-outs and healthcare are redrawing strategies
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This week at a glance
Four trends shape this edition. Third-quarter 2026 data show a market in which buyouts are getting scarcer while exits are reopening (section 1). Traditional US Buy Out funds are moving into defence, even onto ground once reserved for venture capital, at the price of a valuation risk their own executives acknowledge (section 2). Corporate carve-outs, the sale of business units by large groups, are one of the few sources of deals still growing (section 3). And, for lack of supportive resale multiples in regulated sectors, funds are redirecting their healthcare investments towards services paid for directly by the patient (section 4, a catch-up topic dated 23 October). Taken together, these items show that the recovery in exits is real in value terms and that capital is looking for new ground; they do not yet prove that the recovery is turning into distributions to investors, or that the new segments will avoid the exit difficulties met elsewhere.
Benchmarks verified in the reports supplied. According to the preview of PitchBook’s “Q3 2026 Global PE First Look” (data as of 30 September 2026), total global Private Equity deal value stands at $499.2bn in the third quarter of 2026 (including PitchBook estimates for deals not yet reported, i.e. $417.2bn excluding estimates), against $463.0bn in the second quarter of 2026 and $603.0bn in the third quarter of 2025; exit value reaches $481.6bn in the third quarter of 2026 ($450.9bn excluding estimates), against $291.9bn in the second quarter of 2026 and $293.7bn in the third quarter of 2025. Over the first nine months of 2026, reported exits total $984.5bn across 2,202 deals ($1,057.5bn and 3,101 deals including estimates), against $912.8bn across 3,093 deals over the first nine months of 2025: exit value is up 7.9% excluding estimates (15.9% including estimates), while exit count is down 28.8% excluding estimates (+0.3% including estimates). Total deal value reaches $1,381.9bn excluding estimates ($1,526.9bn including estimates) over the first nine months of 2026, against $1,598.7bn over the same period of 2025, i.e. −13.6% excluding estimates (−4.5% including estimates).
1 | Buyouts fall, exits rebound: where are the distributions?
The third quarter of 2026 combines falling deal activity with rising exits, without distributions to investors yet providing the proof.
What the third quarter of 2026 shows. According to PitchBook (data as of 30 September 2026), global Private Equity deal value stands at $499.2bn in the third quarter of 2026, against $603.0bn a year earlier (−17%), while exits reach $481.6bn, against $293.7bn in the third quarter of 2025 (+64%). Both figures include PitchBook estimates for deals not yet reported; excluding estimates, deal value is down 31% ($417.2bn) and exits are up 54% ($450.9bn). The direction is the same on both readings: fewer purchases, more sales.
What KPMG says. The global third-quarter 2026 “Pulse of Private Equity” from the audit and advisory firm KPMG (a 94-page report dated October 2026, announced in a press release of 22 October and relayed on 27 October by the Italian site BeBeez) draws on PitchBook data as of 30 September 2026 and on “announced” deals, meaning announced, pending and completed deals combined (p. 3). On deals, the trailing-twelve-month count falls to 20,362, its lowest since the first quarter of 2021 (p. 11), while their value holds at $2,213bn (about $2,400bn the previous quarter, p. 15); the median buyout size is $101.7m against a mean of $725.5m (p. 17), and KPMG describes investment concentrated in a smaller number of larger deals (p. 2). On exits, value reaches $985.2bn at the end of the third quarter of 2026, a pace close to that of 2025 but well below the record $1,700bn of 2021, and it rests on a small number of deals (about 2,200, against 4,184 for the whole of 2025). On a trailing-twelve-month basis, exit value ($1,400bn) is the highest since the first quarter of 2022 and exit count (3,295) the lowest since the first quarter of 2021, while assets under management (about $6,100bn at end-2025, against about $4,000bn at end-2020) and the stock of companies held by funds (about 34,000 in 2026, against about 24,500 in 2020) are at record levels. In Europe, the Middle East and Africa, trailing exit value ($460.5bn) is the highest in seventeen quarters and exit count (1,434) the lowest in twenty-two quarters (p. 61). In other words, fewer assets are being sold, but of greater value.
Larger exits do not automatically translate into capital returned. Two findings point that way. First, KPMG observes that exit value rests on a small number of deals, that pressure from LPs on funds has increased, although less than expected thanks to continuation vehicles and secondary markets (p. 12), and, in the United States, that longer holding periods have reduced distributions to LPs, limiting their new commitments (p. 47). Second, according to Morgan Stanley Capital Partners (September 2026, PitchBook data on US buyout funds only, as of 31 December 2025), the median fund of the 2006–2019 vintages had returned 0.45x of paid-in capital by its fifth year and more than 1.0x by its eighth, against 0.27x for 2020 funds at their fifth year and 0.07x for 2021 funds at their fourth, i.e. less than a third of the historical pace at a comparable stage. Yet global exit value stood at $1,357.8bn in 2025 (including estimates), against $913.3bn in 2024 (+49%, PitchBook source): the rise in exit value and the slowness of distributions therefore coexisted in 2025.
A clue from the managers, to be read with caution. At its third-quarter results presentation on 22 October 2026 (transcript published on 29 October by the site rallies.ai), Blackstone said it expected “a significant increase in net realizations in the fourth quarter”; this statement covers all of the US manager’s strategies (not Private Equity alone).
Sources: KPMG, “Pulse of Private Equity Q3’26”, October 2026, pp. 2, 3, 11, 12, 15, 17, 47 and 61 (report supplied to the editorial team; press release of 22 October 2026; figures compared with the PitchBook workbook; BeBeez relay, 27 October 2026); PitchBook, “Q3 2026 Global PE First Look” (preview, data as of 30 September 2026, report supplied to the editorial team, Global PE tab); Morgan Stanley Capital Partners, “A New Era for Middle Market Private Equity”, September 2026 (document supplied to the editorial team; PitchBook data, United States, as of 31 December 2025; “Display 2” box, pp. 2–3); Blackstone, transcript of the 22 October 2026 call, published 29 October (aggregator site, full text unchecked). The KPMG figure and the PitchBook workbook come from the same base: proprietary PitchBook data, corroborated only as to orders of magnitude.
Going further: PE Research no. 25 — Private Equity 2026: market recovery or change of regime? (in French)
2 | Defence: Private Equity on venture capital’s turf, and the bubble question
Some buyout managers now fund growth in defence; IPOs account for a large share of recorded exit value.
The figures. According to an article from the US network CNBC dated 26 October 2026 (picked up the same day by the Saudi site Maaal), drawing on PitchBook data, Private Equity growth investment in defence reaches $4bn over the first nine months of 2026, against about $500m in 2024; the number of such deals rises from 15 in 2024 to 31 in 2025, then 48 through September 2026, and they account for 41% of Private Equity deal value in 2026, against 3% in 2024. Jim Corridore, an industrial-sector analyst at PitchBook, sees Private Equity “wading into territory once reserved for venture capital” and rejects the idea of an overheated sector, citing rising budgets, munitions consumption and the arrival of drone and counter-drone technologies. On the venture side, an October report from Dealroom and Resilience Media puts at $27.1bn the funds raised by young companies in NATO and allied countries through September 2026, nearly double the total expected for all of 2025 (venture capital data, cited by CNBC). A survey by the law firm White & Case of 250 executives at British defence companies finds that 97% of them expect to seek significant external funding within the next twelve months.
Two strategies, one sector. Advent International, a US Private Equity manager, announced in March 2026 a commitment of up to $1bn in next-generation defence technologies (notably Shield AI and Saronic, developers of autonomous systems) and has already deployed about three quarters of it, according to Shonnel Malani, managing partner and global head of aerospace and defence. By contrast, Lionel Mestre, a partner at the French manager Weinberg Capital Partners, says his firm remains focused on profitable defence companies with established products, customers and cash flows, that valuations of the small established suppliers it targets have not risen significantly, and that he considers the drone market too immature for a traditional Buy Out strategy; he sees opportunities to finance production capacity and consolidate a fragmented European supply chain.
A note on method, and the risks. Malani believes defence technology companies are increasingly valued on technological potential rather than on revenue, earnings or order book, calls the risk of a bubble “very significant” and says Advent has walked away from several deals at valuations that became “absurd”. On exits, PitchBook counts, since 2021, 504 Private Equity deals in defence for 101 exits, a ratio that includes add-on acquisitions and therefore does not directly measure the share of investments awaiting exit; IPOs account for 70% of the sector’s exit value through September 2026, which exposes investors to stock-market conditions.
What this changes. The segment illustrates the shifting boundary between Buy Out and venture capital, but its own players diverge on the price and maturity of assets; the decisive test will be the ability of exits, today mostly through IPOs, to realise entry valuations.
Sources: CNBC, article on Private Equity investment in defence technology and bubble risk, 26 October 2026 (article read); Maaal, 26 October 2026 (a pick-up of the CNBC article, not independent). Figures from PitchBook, relayed by CNBC: proprietary PitchBook data, not corroborated by an independent source at this stage; the statements of Advent and Weinberg Capital Partners are those of executives quoted by CNBC.
Going further: PE Research no. 6 — How Private Equity can help Europe reach a defence effort of 5% of GDP (in French)
3 | Corporate carve-outs: a source of deals that is holding up
Carve-outs, the sale of business units by groups, are holding up better than other segments of the market, according to the data reported.
The figures. Again according to KPMG (via BeBeez), Private Equity carve-outs worldwide total $182.2bn across 1,254 deals over the first nine months of 2026, putting 2026 on course for the second-best year after 2021; on a trailing-twelve-month basis, value stands at $247.7bn ($249.6bn the previous quarter) and deal count at 1,751 (1,805 before). Energy carve-outs reach a record $56.6bn over the first nine months, and automotive carve-outs their highest level in five years. Europe, the Middle East and Africa lead by count (883 deals, $92.7bn trailing) and the Americas by value ($125.5bn). KPMG also notes (p. 7) that these disposals increasingly involve healthy assets that no longer fit the selling group’s strategy, and that, lacking a conventional exit and under pressure to return capital to LPs (DPI), some managers sell units or components of assets that they can monetise while keeping the rest.
An illustration. On 30 October 2026, the US asset manager Stonepeak (a specialist in infrastructure and credit) completed the acquisition of the transportation finance and vendor finance businesses of the Canadian bank BMO and launched the Longview Capital Solutions platform on the occasion, with BMO retaining a 19.9% stake (Alternatives Watch).
Sources: KPMG, “Pulse of Private Equity Q3’26”, October 2026, pp. 7 and 8 (report supplied to the editorial team; press release of 22 October 2026; underlying PitchBook data; BeBeez relay); Alternatives Watch, 30 October 2026 (access limited to a summary).
Going further: PE Research — list of analyses (in French)
4 | Healthcare: is US Private Equity leaving the reimbursement model?
Complementary perspective — PitchBook article published on 23 October 2026.
The figures. In an article published on 23 October 2026 (Esther Luz, PitchBook News), managers describe a shift in healthcare investment, away from dental, eye-care or addiction-treatment practices whose revenue depends on reimbursement, towards services paid for directly by the patient (aesthetic medicine, weight loss, hormone therapy, concierge medicine, and “medspas”, meaning establishments combining a medical clinic and a wellness centre, with injections and laser treatments among other services). The trigger cited is rising out-of-pocket cost: according to the annual survey of employer health benefits by the US foundation KFF, published on 22 October 2026, the average employer-sponsored family health premium reaches $28,303 a year (+5%) and the employee share $7,471 (+9%, or +$621 from 2025). According to PitchBook data cited in the article, Private Equity deals in physician practice management companies fell 36% in the second quarter of 2026 against the second quarter of 2025 and are expected to fall 46% over the whole of 2026 (proprietary PitchBook data, not corroborated at this stage).
Why the previous model is running out of steam. T. J. Carella, head of healthcare at Warburg Pincus, describes consolidations “for the sake of consolidating” that struggle in a high-rate environment; Tommy Newton, a principal at Xite (a broker of medical and dental practices), quantifies the multiple arbitrage: a bolt-on acquisition with $1m of EBITDA sells for about eight times EBITDA, a dental service organisation (DSO) with $20m of EBITDA for about ten times, i.e. only “two turns” apart. Two cases illustrate the deleveraging phase: EyeCare Partners, a Partners Group-backed group, announced on 28 September 2026 the sale of its optometry division, more than 300 practices, to MyEyeDr. (company press release), “partly to reduce its debt” according to PitchBook; and BayMark Health Services, backed by Webster Equity Partners, completed a restructuring in October that transferred control to its lenders (PitchBook information, not corroborated at this stage).
The new relays, and their risks. Jeremy Hirsch of the bank Houlihan Lokey counts 15 to 25 medspa platforms at or approaching $20m of EBITDA and estimates that a quality platform can be valued at 14 to 15 times pro forma EBITDA; he expects 2027 and 2028 to be among the best years for the sector. The article also reports failures: GVO Partners (seven medspas in the Carolinas and Florida) filed for Chapter 11 in June and was out of cash five weeks later; Ideal Image, backed by L Catterton, closed its Tampa headquarters and cut 255 jobs while selling its clinics in a distressed process; the sale process for LaserAway (Ares Management and Seidler Equity Partners), which could have valued the chain at more than $2bn according to Reuters in June, is no longer active. On the regulatory side, the US Food and Drug Administration sent warning letters to 30 telehealth companies in March and to 25 more in June over the promotion of compounded versions of GLP-1 drugs, and the end of the brand-name shortage (early 2025), then of the exemption allowing these copies, squeezed medspa margins.
What this changes. These direct-pay clinics have not yet faced the test of resale; Tommy Newton points out that dental consolidation is fifteen to twenty years old against three or four for medspas, and that these companies “look great as long as they are acquiring”. No significant exit in this segment is cited in the article. Another obstacle is size: according to Tom Flynn (SV Health Investors), a group with $100m of EBITDA can be too small for an IPO and too large for a new recapitalisation by a Private Equity fund to be easy, the amount to be financed being too high. In medspas, the real test will be organic same-scope growth, practitioner retention and patient acquisition cost, rather than the mere addition of practices.
Sources: PitchBook News, “PE goes out of network in healthcare for some cash injection” (title from the URL), Esther Luz, 23 October 2026 (article read); KFF, Employer Health Benefits Survey 2026, press release of 22 October 2026 (corroboration of premium figures); Business Wire, EyeCare Partners Announces Sale of Optometry Business, 28 September 2026 (corroboration of the sale; price and reasons not verified). Medspa valuation data and dental multiples are estimates from interviewees of PitchBook, not audited market averages. The information on BayMark, GVO, Ideal Image, LaserAway and the FDA letters is reported by PitchBook; Reuters is cited for LaserAway.
Going further: PE Research no. 8 — US Private Equity under fire (in French)
