PE Enters “Execution Phase” After $1.2T Rebound Year — Evening Brief – 03.02.26
After a hesitant first half marked by tariff shocks and valuation standoffs, U.S. private equity closed 2025 in full stride. Deal activity topped 9,000 transactions and $1.2 trillion in value, only the second time on record that annual PE volume has cleared the trillion‑dollar mark, according to CBH’s “Private Equity Report: 2025 Trends and 2026 Outlook.” With the Fed cutting rates three times in the back half of the year and dry powder near $1.1 trillion, the firm argues 2026 is set up as a “year of execution,” with sponsors focused on deploying capital, accelerating exits and returning cash to LPs.
Large‑cap deals did much of the heavy lifting. Roughly 150 U.S. megadeals (enterprise value above $1 billion) generated about $567.8 billion in aggregate value, surpassing 2021’s dollar total even as deal counts stayed slightly lower. Add‑on acquisitions remained the workhorse at about 73% of buyouts, while corporate carve‑outs regained momentum, rising back above a 10% share of buyout activity by late 2025 as sellers shed non‑core units and sponsors leaned into complex separations.
Sector-wise, technology and healthcare led the charge. Tech accounted for roughly a quarter of U.S. PE deal value, with sponsors targeting recurring‑revenue software, AI‑enabled analytics and cybersecurity platforms. Healthcare deal value jumped to an estimated $140 billion across 1,153 transactions, with sponsors concentrating on digital health, provider services roll‑ups and carve‑outs from larger systems.
Fundraising was the main soft spot as 2025 marked the weakest U.S. PE fundraising year since 2020, as overallocated LPs concentrated commitments with large, established managers and slowed new pledges to smaller and emerging firms. Even so, CBH notes that funds which did close generally hit targets on normal timelines, underscoring that the bottleneck is capital availability, not lack of opportunity, and setting the stage for another active deal year in 2026.