The European PE industry is set to gain further momentum in 2026, but pitfalls remain
After a period of stabilization, our latest annual survey shows the PE market recovery is strengthening. But not all of the indicators are positive. So where will the opportunities lie in 2026? Our assessment of the findings explores trends, concerns and expectations for the year ahead.
The Outlook is the 17th consecutive publication in a series launched by Roland Berger in 2010.
"The European Private Equity Outlook 2026 highlights a sector regaining momentum, with technology and digital solutions leading the way. As value creation and specialization become more critical, investors are focusing on resilience and innovation to drive future growth."
The private equity (PE) market recovery will continue apace in 2026, according to the latest edition of our European Private Equity Outlook. Three quarters of respondents in our annual expert survey said they believed there will be more M&A activity involving PE in 2026 than in 2025, showing that optimism in the sector remains high. Just 10% said they expected a decrease in transactions. Key reasons for the positive outlook included improving debt availability, higher pricing visibility and a sizeable pipeline of exits and sell-side processes that are likely to hit the market in 2026.
Central and Eastern Europe is expected to see the strongest gain in momentum by region, followed by the DACH (Germany, Austria, Switzerland) region and the Nordics. Our respondents believe the Technology,
software & digital
solutions (chosen by 69% of respondents) and Business services &
logistics
sectors (68%) will see the highest number of PE M&A transactions.
In other key findings, small- and mid-cap markets recorded the strongest growth expectations for 2026 (chosen by 64% of respondents), with large-cap conditions thought to be easing, while value creation remains a key priority for PE deals.
Valuations come back down to Earth
The study explores which measures PE investors plan to take against potential downturns. Investing in resilient businesses and avoiding cyclical industries, making add-on acquisitions, and preparing portfolio companies for challenging times through dedicated weatherproofing programs ranked highest among our respondents, while increasing participation in take-private transactions and investing in more distressed assets were lowest.
Elsewhere, there was a notable fall in the number of respondents describing valuation multiples as overvalued, with the figure dropping from 59% in late 2024 to 49% in 2025.
Technology, software & digital solutions,
and
Infrastructure
were thought the most likely industries to experience increased valuation multiples, and
Automotive
and
Chemicals
the least likely.
"We see European private equity moving from stabilization toward renewed momentum. Deal activity is picking up, exit markets are normalizing, and value creation is becoming more execution-driven, supported by digitalization and AI."
Almost 80% of PE professionals expect the targets available in 2026 to be as attractive or more attractive than the targets available in 2025, a fall of 19 percentage points compared to 2025. In a significant rise, 21% of PE professionals believe that the targets will be less attractive than in the previous year (1% in 2025). Primary buy-outs, carve-outs and secondary buy-outs are perceived to be the most important sources of targets in 2026.
In debt financing, a majority of respondents rate end-2025 debt availability neutral-to-good across deal sizes, with optimism particularly high for small-cap targets. As in the previous survey, the main hurdle for the availability of debt financing is the low predictability of cash flows.
In summary, the Outlook once again provides invaluable intelligence on the current thinking within the PE sector, as well as casting a light on potential bright spots and emerging opportunities. For lots more detail and analyses of all the findings, download a copy of the full report or contact one of our experts.
French Private Equity Outlook 2026: Insights from the French market
The French private equity market experienced a mixed year in 2025, marked by a notable decline in closed deals, which fell by -13% compared to 2024. In contrast, the European market rebounded with a +13% increase in deal activity. This disparity can be attributed to several factors, including companies’ performance often falling short of expectations, persistent valuation gaps between seller and buyer perspectives, and a more volatile political and regulatory environment in France. As a result, many processes were postponed or failed altogether. Fundraising efforts also faced challenges, with varied success rates across the board.
Despite these hurdles, the available dry powder in the market remains significant. Many deals that did not materialize in 2025 are anticipated to come back to market, particularly in the large-cap segment. The opening of the 2026 window is expected to bring a wave of exits, especially ahead of next year’s presidential elections in France.
Sector-wise, investor appetite has been and is likely to remain variable in 2026. While there is a strong focus on business services, aerospace & defense, and infrastructure, other industrial sectors – particularly automotive – as well as IT services, consumer goods, and regulated sectors remain divisive in terms of investment interest.
Beyond the volume of ongoing processes, the number of investors actively pursuing deals has also seen a decline, except for certain highly contested “flagship” assets that continue to attract attention.
Additionally, many industrial players are taking proactive measures to refocus on their core business and deleverage by carving out specific activities. This trend is expected to draw private equity funds that are well positioned to analyze and capitalize on these opportunities.
Looking ahead, 2026 is anticipated to place an even greater emphasis on value creation for portfolio companies, whether through strategic build-ups, top-line growth initiatives, or bottom-line improvements. Furthermore, the integration of artificial intelligence (AI) is expected to play a pivotal role in due diligence analyses and fund management operations, enhancing decision-making processes and operational efficiencies.
In summary, while the French private equity market navigates a complex and volatile landscape, there remain significant opportunities for investors and portfolio companies to identify value creation avenues and adapt to the evolving market dynamics.
Italian Private Equity Outlook 2026: Insights from the Italian market
The Italian private equity (PE) market remains focused on the mid-market, which has been a significant driver of growth in 2025 and is expected to strengthen further in 2026. The outlook is positive, bolstered by a solid pipeline of deals, the return of deferred processes to the market, and a gradual alignment of valuation expectations between buyers and sellers.
Growth in 2026 is anticipated to be fueled by abundant dry powder, a backlog of postponed processes from the past two years, and several large-cap deals in the pipeline, all of which are supported by improved price alignment between buyers and sellers. However, geopolitical and macroeconomic risks continue to present key uncertainties for the market.
The Italian PE market is distinguished by a strong presence of mid- and small-cap funds, with an increasing share of club deals and active family offices. The infrastructure segment, while less developed compared to other countries, is largely dominated by international players. Italy’s market remains highly fragmented across various industries and services, creating attractive buy-and-build opportunities. This fragmentation provides fertile ground for private equity to support growth, professionalization, and structural global expansion.
As we look ahead, many private equity firms are launching dedicated mid-market funds and teams to capitalize on these attractive segments, which is likely to increase competitive pressure. The growing emphasis on buy-and-build strategies will heighten the need for effective post-merger integrations. Additionally, as artificial intelligence (AI) becomes increasingly important in deal assessment and value creation, it is essential for funds to enhance and strengthen their internal capabilities in this area.
Nordic Private Equity Outlook 2026: Insights from the Nordic market
The Nordic private equity market is heating up, with positive momentum observed since November 2025. As we look toward 2026, we anticipate a strong year ahead, driven by sustained interest in assets across infrastructure services, professional services, safety, security, defense and AI. We expect to see more regular auctions, continued market consolidation, and even a few IPOs, reflecting the evolving landscape of private equity in the region.
This evolution is largely supported by significant investments earmarked across all Nordic countries to enhance infrastructure development, including water assets, roads, tunnels, rail systems and defense initiatives. Many original equipment manufacturers (OEMs) are currently experiencing full order books and are increasingly outsourcing services to smaller firms, which creates consolidation opportunities for private equity, especially across defense and niche manufacturing. Additionally, a trend of corporates separating their product and service business lines is generating further carve-out opportunities.
Investors appear to be adapting to market volatility, with more dry powder expected to be deployed compared to previous years. The IPOs will also invigorate the private equity community, providing fresh avenues for investment. The amount of capital raised and the number of transactions per capita in the Nordics is strong, contributing to a relatively stable investment environment that often leads the way when broader market conditions shift.
Primarily focused on small and mid-sized assets, the Nordic PE market is less volatile than the large-cap market. The prevalent “buy and build” strategy drives the market, transforming smaller assets into platforms that can be further consolidated and potentially taken public. Over the years, the Nordic PE market has cultivated several compelling assets across the B2B services sector, including infrastructure services, business process outsourcing (BPO), legal services, technical consulting, fire safety installation, and software. The question is how international funds will evaluate such assets going forward.
We anticipate increased scrutiny on fund performance. High-performing teams will likely find it easier to raise new funds, while those with lower performance metrics may face challenges in securing future investments. Additionally, we foresee a trend of consolidation among private equity investors as the market continues to evolve. In summary, the Nordic private equity market is poised for a dynamic and promising year in 2026, characterized by growth, consolidation, and a focus on value creation across sectors.
While the recovery in the Iberian private equity market is expected to be gradual, shaped by recent volatility, there is a clear and growing appetite for increased activity from all sides. This dynamic is driven by a fundamental need to act: Financial investors must deploy substantial dry powder, while corporates and funds holding 2019–2020 vintage assets face pressure to bring quality inventory to market. This convergence is set to unlock significant mid-market liquidity.
This heightened focus is no coincidence. Iberia offers the potential to increasingly become a safe harbor, offering attractive growth and economic conditions. The result is a vibrant and increasingly sophisticated market, evidenced by the growing commitment from larger sponsors who are deploying dedicated funds for mid-market transactions and validating the segment’s potential.
This environment presents clear and actionable investment theses. Beyond the resilient sectors of healthcare, technology, and energy transition, the most compelling opportunities now lie in executing proven value-creation strategies. In particular, buy-and-build platforms are attracting rapidly growing interest as a key strategy for domestic and European consolidation, alongside high-impact digitalization initiatives in the professional and industrial services sectors.
In this market, a gradual recovery is not a signal to wait but a call for strategic precision. Success in 2026 will be defined by proactive preparation and conviction. For sellers, this means maximizing value through rigorous preparation. For buyers, the key to winning deals and securing investment committee approval will be a pre-vetted, actionable value creation plan. This discipline is precisely what will separate the leaders from the pack and unlock superior returns.
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