Private equity, difficult start to the year with declining investments and inflows

Complex start to the year for private equity in Europe. The sustained recovery in activity, which several had estimated after the last two quarters of growth in 2025, did not materialise. According to market data, 2,187 deals worth €139.7bn were recorded between January and March, down from 2,497 investments totalling €180.3bn in the final quarter of 2025. The figure was also lower than in the first quarter of last year, when fewer deals were recorded (2,104) but for a larger amount of EUR 153.4 billion.

The evolution of the market emerges from an initial analysis conducted by PitchBook, according to which "European private equity entered 2026 maintaining its initial momentum, before the conflict with Iran suddenly challenged its trajectory. Escalating in the second half of the first quarter, the crisis triggered a 22.6% quarter-on-quarter decline in deal value and a 12.4% drop in the number of deals". In more detail, the analysis also shows how funds are moving with particular caution, as evidenced by the sharp increase in club deals and growth in add-on deals: "Sponsors are operating selectively and resorting to risk syndication rather than taking on new exposure," comments Nicolas Moura, senior analyst at PitchBook PE.

The Achilles' heel, as in recent years, remains the exit activity, which retreated in the first quarter, with the value down 9.5% quarter-on-quarter to 80.5 billion and the number of transactions down 31.3% to 335, while liquidity gradually concentrated at the top end of the market.

"Secondary buyouts accounted for the predominant share of the total value of exits, in a context where the IPO window remains closed and corporates have reduced their presence. The UK and Ireland stood out as a positive exception, recording the best quarter since Q3 2023 and the first ever 'PISCES' transactions, while France continues to show a sequentially negative trend,' Moura points out.

As a result, fundraising remains weak as capital flows back to investors remain low. In the first quarter, PitchBook counted only 23 funds raised for a total of €18 billion. "However, the mid-market segment," continued the firm's senior analyst, "continues to show resilience, with more step-ups and the largest share of capital raised since the beginning of the year. The EUR 5.5bn closing of Triton Partners, the first European fund above the EUR 5bn mark in the last year, represents the most significant transaction of the period. Regionally, France and Benelux lead the fundraising, followed by the UK and Ireland.