Private equity is showing its clearest signs of recovery in years, but the industry's most persistent problem remains largely unresolved: getting money back to investors.
Managers raised approximately $312 billion in capital commitments in the first half of 2026, according to the Private Equity Trends Report 2026 published in August 2026 by With Intelligence, part of S&P Global.
That figure puts the industry more than halfway to last year's full-year total of $490 billion with six months still remaining and represents the strongest first half on record by With Intelligence's measure.
However, the recovery is layered with tension as deals are taking longer to close than at any point in the past decade, holding periods have stretched well beyond historical norms, and limited partners are increasingly directing capital toward managers who can demonstrate actual cash distributions rather than paper gains.
"Private equity firms have experienced a tumultuous few years of stalled exits, strained fundraising and wild swings in both technological and geopolitical volatility," said Samuel Dale, research lead for private equity markets at With Intelligence. "However, we are starting to see some significant pockets of new deal activity emerging - particularly in industrials and infrastructure-linked sectors - as well as early signs that fundraising is starting to improve, which may make 2026 an important transitional year for the industry."
The median time to close a North American private equity transaction reached 274 days in Q2 2026 (roughly nine months) according to With Intelligence data.
Between 2018 and 2021, that figure typically sat between 200 and 220 days and the shift reflects a more demanding environment for due diligence, financing, and regulatory clearance across all buyer types, deal sizes, and transaction structures.
Despite slower closings, deal volumes are climbing in select sectors. First-half 2026 activity has already surpassed second-half 2025 levels across 30 subindustries, with 12 of those recording at least a doubling in deal volume.
Five of the 12 fastest-growing subindustries came from industrials, with commercial aircraft, HVAC, and freight forwarding among the standout categories. Defense exposure, infrastructure linkage, and logistics are drawing buyer interest as geopolitical instability continues to shape investment priorities.
InvestmentNews has tracked the broader private equity revival noting that operational outperformers, not financial engineers, are increasingly positioned to capture the next cycle's gains.
Holding periods climb above five years across every major sector
The more consequential story for institutional allocators may be what is happening to portfolio holding periods.
Median holding periods now exceed five years across all major sectors, up from approximately 4.0 to 4.5 years in 2018 and 2019. The slowdown in M&A activity since the 2021 dealmaking boom, compounded by macroeconomic uncertainty from 2024 onward, has left a growing backlog of mature portfolio companies still awaiting exit.
Business services and technology now carry the longest median holding periods at 5.3 years, despite historically turning over faster than other sectors.
Consumer portfolio companies have seen their pre-exit holding periods ease from 6.1 years in 2023 to 5.2 years. Industrials remains the only major sector below five years, at 4.9 years; a reflection, the report suggests, of stronger buyer demand tied to defense, infrastructure, and data-related industries.
Industrial goods stands out for both current deal volume and future supply pressure. Around one-third of its portfolio companies have been held for at least seven years. The sector's declining median holding period suggests exits are already progressing, while a deep pool of mature assets should continue to support deal flow.
Fund-level data offers a measure of progress. Between the end of 2024 and the end of 2025, the ratio of residual value to paid-in capital declined across most fund groups while distributions to paid-in capital increased, indicating that more value is being realized and returned to investors.
The 2014 vintage recorded an 8 percentage point decline in its residual value share. Recent vintages, however, remain heavily unrealized.
The fundraising recovery is real but unevenly distributed. The top 20 funds by size accounted for $171 billion of the $312 billion raised in H1 2026 - more than half of all capital closed in the period. Vehicles from KKR, EQT, Clearlake, and Blackstone dominated that group, reflecting limited partners' continued gravitational pull toward global multi-asset managers with established track records.
Secondaries have emerged as a critical pressure valve. The asset class surpassed $50 billion in fundraising in H1 2026, accounting for just over 15% of all private equity fundraising and supporting With Intelligence's forecast that global secondaries commitments could exceed $100 billion for the full year.
Transaction volumes reached $121 billion in H1 2026, according to Evercore data - the strongest first half on record - with market participants projecting record full-year volumes of $250 billion to $270 billion.
Over half of H1 secondaries fundraising was raised by just two funds: Coller International Partners IX, which closed $17 billion, and the Partners Group Secondary VIII, which raised $9 billion. GP-led transactions continue to account for around half of secondaries volume, reflecting growing use of continuation funds as sponsors seek liquidity without forced exits.
As InvestmentNews has reported, the private equity market is increasingly split between managers who can point to real cash returns and those still leaning on unrealized valuations - a divide that is directly shaping where LP dollars flow.
On the investor side, large allocators are responding to the slow-distribution environment by consolidating relationships with high-conviction managers and using strategic partnerships to secure favorable terms and early access to co-investment opportunities.
California Public Employees' Retirement System (CalPERS), based in Sacramento, led all allocators by mandate count in the first half of 2026 with 62 mandates and $13.6 billion in disclosed mandate value, according to With Intelligence data compiled on July 15, 2026. The largest of those mandates went to longstanding partners including Bain Capital and Arlington Capital.
Not all large allocators are doubling down on existing relationships. Texas Teachers - formally the Teacher Retirement System of Texas, based in Austin - committed approximately 40% of its private equity spend in H1 to new managers, targeting small and mid-market buyout exposure.
Managing director Neil Randall said in July 2026 that firms with less than $3 billion in assets were the target: "We think there is more alpha potential there and we have the team to execute on it."
Co-investments have become a core component of institutional private equity strategy. California State Teachers' Retirement System (CalSTRS) aims to co-invest one-third of its pacing target for 2026, reflecting the broader trend of large allocators dedicating substantial portions of their annual private equity spend to direct deal participation.
On the manager side, San Francisco-based Francisco Partners led all firms in mandate count year to date through July 15, 2026, with 45 mandates and $3.3 billion in disclosed mandate value.
The firm's double offering of its flagship buyout fund and companion Agility series to limited partners drove that lead. HgCapital, headquartered in London, and Stockholm-based EQT Partners followed with 26 and 22 mandates, respectively.
The growth of private markets access products for a broader investor base, a trend InvestmentNews has covered extensively, adds another dimension to how capital is ultimately flowing into these strategies beyond traditional institutional channels.
Across the market, the central tension of 2026 remains unchanged: deploying new capital while generating liquidity from existing portfolios. With fundraising improving, deal activity selectively accelerating, and secondaries providing a growing source of exits, the data suggests the industry is moving, if not yet cleanly, in the right direction.
Sam Altman says market debut would be ‘ill-advised’ but Anthropic chases a $2 trillion valuation despite calls for AI development pause.
DFO Management is in advanced talks to acquire the Tampa-based insurance brokerage at a premium to its current market value.
Daejon Love and Taylor Chan's $1.3 million romance fraud scheme exposes how AI search engines can be manipulated by fabricated online identities
“It was a third party scam,” said the attorney representing the claimants.
Meanwhile, &Partners draws another Commonwealth practice, and Wealthcare welcomes a $550 million planning practice in the Northeast.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
