US private equity deal value fell 13.6% year on year in the third quarter of 2026, as the industry remained under pressure from limited exits, geopolitical uncertainty and the prospect of further interest-rate rises, PitchBook data shows.
Exit value also declined, dropping 14.1% compared with the same quarter last year. The figures suggest the sector’s long-awaited recovery remains uneven, despite private equity firms holding more than $3 trillion in assets under management.
Kyle Walters, a PitchBook analyst, said the industry had been caught in a prolonged cycle of expecting conditions to improve.
“You hear it every year now,” he said. “You heard it in 2023, where private equity said: ‘It could come back this year.’ Then, you get to 2024, and 2024 is going to be a different year. Then, you get to 2025 and 2025 was a bit better, and people say ‘maybe this is the year.’”
Walters said assets under management were growing at roughly half the annual rate recorded during the previous decade to 15 years. “A 12% annual growth rate over the last ten, 15 years. We’re closer to half that now,” he said.
He described the current environment as “the new norm”, with firms having to deploy capital while facing difficult market conditions and bring companies to market with unresolved issues.
Fundraising has become particularly challenging over the past 18 to 24 months, Walters said. Limited exits mean investors are receiving fewer distributions from general partners, leaving them with less money to deploy and prompting them to focus on fewer fund managers.
“That’s not to say there are fewer managers raising capital,” Walters said. “It’s that fewer managers are crossing the finish line, they’re fighting over scraps of the fundraising pie.”
The largest firms have continued to attract substantial sums. KKR reached its $300 billion fundraising target in 30 months, although the goal had originally been set over three years.
However, a possible new round of interest-rate rises could prolong the slowdown. Walters said a rate increase would probably leave the fourth quarter looking much like the third, with transactions continuing but falling short of the scale expected at the start of the year.
“You’ll still see transactions take place—it’s just not going to be at the scale we hoped for coming into the year,” he said.
