Q1’26 Pulse of Private Equity

EMA region sees strong start to the year before new wave of uncertainty causes pause

Entering Q1’26, there was momentum in the PE market in the EMA region, particularly coming off a three-year investment high of $734 billion in 2025, which occurred across a relatively steady number of deals (9,043) compared to 2024. The first two months of the quarter built on this momentum, attracting all but one of the largest PE deals of the quarter, including the $9.2 billion buyout of Poland-based parcel locker company InPost by a consortium including Advent International and FedEx,¹ the buyout of Ireland-based aircraft leasing company Macquarie Air Finance by Dubai Aerospace Enterprise for $7 billion² and the buyout of Spain-based waste management company Urbaser by Blackstone and EQT for $6.5 billion.³

But external influences hit the market hard toward the end of the quarter, putting some of the EMEA region’s positive dynamics on hold and causing some PE investors to press pause on their deal activities amid concerns about the new conflict in the Middle East and its potential impact on inflation, interest rates, and supply chain risk.

EMA region sees 12-month rolling PE investment total soften; UK continues to see robust investment

During Q1’26, the EMA region saw $154 billion in PE investment across 1,816 deals, totals that pulled the region’s 12-month rolling totals down to $718 billion across 8,522 deals, as compared to $743 billion across 9,043 in Q4’25. The UK continued to attract the largest share of PE investment in the region during Q1’26 ($39 billion); the UK also saw an increase in its 12-month rolling PE investment total from $196 billion in Q4’25 to $204 billion in Q1’26. Germany attracted the second largest share of investment in Q1’26 ($15 billion) followed by Spain ($14 billion), France ($12 billion) and India ($10 billion).

High-quality assets remain key priority, in addition to add-ons focused on driving value creation

With capital availability not a significant issue during the quarter, PE investors in the EMA region remained more than willing to spend on strategic assets, carve outs and PE-to-PE transactions, but not indiscriminately. While high-quality assets drew big deals, more average assets had a much more difficult time attracting attention. Add-on transactions also continued to attract solid activity in the region, driven partly by PE investors considering add-on opportunities from the get-go when evaluating platform deals.

Trends to watch for in Q2’26

The Iran conflict in Q1’26 underscored the EMA region’s continued sensitivity to geopolitical disruption. As a result, although the broader outlook for PE remains relatively constructive, investors will likely remain selective and cautious in deploying capital over the near term. AI infrastructure, including data centers, will likely remain a very resilient sector for PE investment heading into Q2’26, in addition to digital infrastructure, energy transition assets and energy infrastructure, transportation and services. The sports and entertainment sector is also expected to see increasing interest from PE investors in the EMA region, driven in part by trends occurring in the US, in addition to professional services.

Many eyes are going to be on the exit environment in the EMA region over the remainder of the year, given the significant backlog of assets held by PE firms and the pressure on firms to provide liquidity and opportunities for investors to exit. With IPO exits viewed as off the table again, some PE firms may need to be creative to get at least partial exits, such as through minority stake sales, in order to avoid exiting under value.

From an industry standpoint, we continue to see pockets of momentum in areas such as infrastructure and transport, likely driven in part by investor FOMO around large-scale deals. These sectors are also benefiting from meaningful government funding, which is helping create positive tailwinds despite ongoing geopolitical uncertainty. At the same time, professional services continues to attract significant interest, with PE firms actively investing across IT services, consulting, advisory, audit, tax, and legal businesses.

Tilman Ost

Global Private Equity Advisory Leader

KPMG in Germany