Private equity managers and corporate leaders are expressing renewed confidence that could drive a busier mergers and acquisitions calendar through 2026. According to a new industry survey released this week, sentiment is turning positive after two uneven years, with respondents pointing to a broader pipeline of deals if economic conditions hold.
The survey suggests that fund managers and operating companies share a common view: deal activity could accelerate within the next 18 to 24 months as financing costs stabilize and valuations reset. It arrives at a time when investors and boards are hunting for clarity on rates, pricing, and exit timing.
Background: From Slowdown to Reset
Dealmakers have faced a stop-and-start market since 2022, when higher interest rates and volatile earnings pressured valuations and delayed exits. Lenders tightened terms, and many sellers waited for better pricing. That pushed a backlog of opportunities into later years, as companies focused on cost control and operational fixes.
As rates show signs of peaking and inflation cools, executives are reassessing timing. The survey feedback indicates that more participants are preparing assets for sale, while buyers are lining up capital to act when valuations meet internal hurdles. A healthier IPO window in select sectors would also give private equity funds more confidence in exits and recycle capital into new deals.
What the Survey Says
“Survey shows stronger optimism among PE firms and companies fueling broader 2026 deal pipeline.”
The message is clear: deal teams expect a more active market by 2026. While detailed breakouts of sectors and regions were not provided, respondents pointed to improving visibility on financing, earnings, and valuation benchmarks as central to their outlook.
Optimism alone does not close deals, but it can speed internal approvals, expand auction participation, and bring more sellers to market. That flywheel effect often builds momentum as price expectations align.
What It Means for Buyers and Sellers
For buyers, a brighter outlook could mean more competitive processes and quicker timelines. Many are refreshing playbooks for add-ons, carve-outs, and corporate partnerships. They are also sharpening diligence on cash flow quality and pricing power to manage rate risk.
For sellers, the signal may be to get files ready. Companies that invested in operational improvements during the downturn could command stronger valuations if earnings resilience is proven. Sponsors weighing exits will watch debt markets closely to gauge buyer capacity and leverage levels.
Corporate acquirers, flush with cash in some industries, may pick up pace on strategic deals that unlock growth or supply chain control. Cross-border interest could rise if currency and policy conditions stabilize.
Key Drivers Shaping the 2026 Pipeline
- Financing costs: Stable or lower rates would support higher leverage and valuations.
- Earnings visibility: Clearer guidance gives both sides confidence to price risk.
- Exit routes: Healthier IPO and secondary markets help recycle capital.
- Sector performance: Assets with pricing power and cash flow durability remain in focus.
Risks and Unknowns
Risks remain. A renewed inflation spike or policy shock could constrain credit and delay processes. Geopolitical uncertainty may widen bid-ask spreads, especially in cyclical sectors. Regulatory reviews can also extend timelines for larger combinations.
Valuation gaps are another hurdle. Some targets still anchor to 2021-era multiples, while buyers price in higher funding costs and mixed demand. Closing that gap will require stronger growth proof or creative structures, such as earnouts or minority stakes.
Signals to Watch Next
Market participants will track lending terms, sponsor distributions, and the pace of announced processes through late 2025. If auctions draw larger buyer pools and financing packages firm up, the projected wave for 2026 grows more likely.
Boards are also signaling more openness to strategic reviews. That includes potential divestitures of non-core units and partnerships that de-risk expansion. Deal teams are building pipelines now to move quickly when windows open.
The headline from the latest survey is cautious but clear: confidence is returning, and planning is underway for a fuller calendar by 2026. The next test will be the fall deal season, where pricing discipline and lender appetite will set the tone. If fundamentals hold, expect a steadier flow of processes, more diverse structures, and a path back to normal exit cycles.
