Q3’26 Pulse of Private Equity

Twelve month rolling total for PE investment falls for first time in over a year

PE investment in the EMA region was $521.4 billion across 6,249 deals at the end of Q3’26, slightly softer than the pace needed to match the level seen in 2025. After rising for four straight quarters, the rolling twelve-month total for PE investment fell noticeably, from $818.2 billion to $764.4 billion quarter-over-quarter. Rolling twelve-month deal volume also declined, from 9,251 in Q2’26 to a nine-quarter-low of 8,805 deals in Q3’26 as PE investors prioritized high-quality deals over quantity.

Industrial manufacturing, infrastructure and transport, and automotive all see significant interest

The TMT sector continued to attract the largest amount of PE investment in the EMA region, with $128.5 billion across 2,069 deals at the end of Q3’26; however, both investment and deal volume remained soft compared to the levels seen in 2024 and 2025 as PE investors continued to steer clear of software and reassess their portfolios for AI impact. The energy and natural resources sector and consumer and retail sectors also attracted significant investment, with $67.4 billion and $64.6 billion respectively — although both were tracking well short of levels seen over the past two years.

Twelve-month exit value continues to climb as deal volume sinks to twenty-two quarter low

Exit value in the EMA region was $320.9 billion as of the end of Q3’26, on track for a five year high despite seeing only 945 exits over the same time period. The Q3’26 rolling twelve-month totals highlight the counter trends well, with a seventeen-quarter high in exit value of $460.5 billion and a twenty-two-quarter low in exit volume of 1,434. Acquisitions remained the most prominent exit strategy in the EMA region as dealmakers continued to prioritize strategic, add-on investments and high-quality deals viewed as having significant value creation potential. As of the end of Q3’26, acquisitions in the EMA region accounted for $113.1 billion, well within reach of 2021’s record high of $143.5 billion.

Although it has not yet been reflected in the exit numbers, pressure on PE firms to exit older assets has continued to mount, prompting them to put more companies up for sale or to ready them for sale.

Trends to watch for in Q4’26

Heading into Q4’26, a number of uncertainties are expected to continue to affect the EMA region, from ongoing geopolitical tensions and domestic political challenges to the September decision by the European Central Bank to raise interest rates for a second time this year given energy-driven inflation stemming from the ongoing conflict in the Middle East.13 This continued uncertainty is expected to keep PE investors focused on strategic opportunities, with a laser focus on value creation. PE investments will likely remain highly concentrated, particularly in areas like Physical AI, industrial manufacturing, defense, and AI infrastructure. Buy-and-build strategies are also expected to drive significant deal activity in the coming months, as PE investors look to strengthen and scale existing portfolio companies.
Exit activity will likely remain one of the most critical area to watch over the next few quarters given the significant backlog of exits, increasing pressure on PE funds, and growing recognition that continuation funds are not the solution in all circumstances. Carve-outs are also expected to remain a major opportunity over the coming quarters, as are successions at family - owned businesses.

What all of the deals we’ve seen over the last few months have in common is that they are either a strategic deal, such as a PE firm with a platform in a specific sector buying an add-on, or they’re an investment into assets where the buyer see considerable sustainable and long-term value creation potential. This is a major change from the past. We’ve been predicting it for some time, but now we’re seeing it in play. PE investors are only buying assets that have a robust and sensible value creation story.

Tilman Ost

Global Private Capital Advisory Leader, KPMG International and EMA Private Capital Leader

KPMG in Germany