Bain released its 2026 Global Private Equity Report last week, showing that private equity posted its second-best year ever in 2025 based on headline transaction value. New investments climbed 44 percent to $904 billion, and exits jumped 47 percent to $717 billion.
At first glance, that seems like the long-awaited turnaround that investors have been hoping for.
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But, exclude the 13 transactions of $10 billion or more, and things look considerably worse. Those megadeals contributed 69 percent of the year’s growth in deal value, and overall deal count actually fell 6 percent to 3,018 transactions.
Exit value improved materially in 2025, but distributions to limited partners remain stuck in crisis territory. As a percentage of net asset value, distributions have now held below 15 percent for four consecutive years to set an unwanted industry record.
The situation could arguably be worse than the aftermath of the financial crisis because the current drought has persisted far longer.
Average hold periods at exit have grown to more than seven years, up from five to six years during the 2010–21 period. Nearly 40 percent of portfolio companies are now held for more than five years, compared with 29 percent in 2019.
The companies that did exit successfully in 2025 were overwhelmingly ‘gems’, high-quality assets, or those with strong strategic relevance. General partners had far more difficulty moving anything with weaker momentum or an uncertain outlook.
GP- and LP-led secondaries continued their strong run, with 41 percent year-over-year growth. According to Bain’s survey data, roughly a quarter of general partners initiated or completed a continuation vehicle over the past two years, and approximately 40 percent plan to explore one over the next 12 to 24 months. More than half of survey respondents cited generating liquidity as a primary motivation, with 42 percent focused on securing fresh capital for add-on acquisitions.
But, even with that growth, continuation vehicles still only account for less than 10 percent of total exit value. Limited partners also indicate little appetite for any more than one such transaction per year from any given general partner.
Amid ongoing liquidity challenges, global alternatives fundraising plateaued at roughly $1.3 trillion in 2025, while buyout dropped 16 percent to $395 billion. The total number of funds closed fell 18 percent overall and 23 percent for buyout specifically.
Though limited partner surveys consistently report that the majority plan to maintain or increase private capital allocations, they’re still working against unfavorable distributions math: by year-end 2025, 53 percent of LPs in a Private Equity International survey indicated they were limited in making new commitments because prior commitments had not yet been called (a 15-percentage-point increase from year-end 2024).
According to Bain’s analysis, around 70 percent of fund series that would typically have raised by now have done so.
It’s not quite the zombie fund apocalypse some projected, though there are likely to be casualties among the 30 percent that have not yet raised.
In normal periods, roughly 15 percent of fund series fail to reraise. During the global financial crisis, that rate climbed to roughly 20 percent, which may serve as a good benchmark for where the current cohort will shake out.