Q2’26 Pulse of Private Equity — U.S. and global investment trends
A KPMG quarterly analysis of global private equity activity
Overview
The Q2 Pulse of Private Equity report highlights a "flight to quality" amid ongoing macroeconomic uncertainty. While deal volumes hit multi-year lows, investment values remain solid—reaching $1 trillion globally and $545 billion in the US by mid-2026. Sponsors are passing on smaller transactions, choosing instead to prioritize large, high-conviction deals in transformative sectors like AI infrastructure, energy, and industrial manufacturing.
US investment is heavily shaped by AI's rapid disruption and the resulting demand for physical infrastructure. Firms are shifting capital from the traditional software playbook toward AI-native businesses, data centers, and energy grids. Investors are also targeting cycle-resilient sectors like legal services. Although US exit volumes are suppressed as sponsors hold assets to avoid discounted sales, overall exit value remains resilient at $273.1 billion, led by industrial manufacturing and infrastructure.
Globally, the Americas led in funding, though the EMA region secured three of Q2’s largest deals. While TMT attracts the most investment, the energy sector is surging toward a record year, fueled by the energy transition and AI power needs. As AI disrupts software, global investors are also pivoting toward industrial manufacturing hardware. While acquisitions dominate current exits, a reopening US IPO market signals a potential boost for global exit activity later this year.
Dive into our thinking:
Q2 2026 Pulse of Private Equity report
Download PDFU.S. insights
1
PE investment in the US holds steady, with $545 billion in investment at mid-year
US PE investment reached $545.1 billion at H1 2026, on pace to match 2025's $1.1 trillion full-year total. Deal volume lagged significantly — 3,926 deals versus 9,350 in 2025 — with rolling twelve-month totals declining from 9,095 to 8,568. Investment remained concentrated in a small number of large, marquee deals, as investors prioritized scaled, resilient businesses with clear growth visibility.
2
AI and energy infrastructure attract largest PE deals in Q2’26
Q2'26's top three deals highlight PE's focus on AI infrastructure and energy: KKR's $10 billion launch of Helix Digital Infrastructure, Stonepeak and Bernhard Capital's $4.5 billion buyout of Cleco Holdings, and KKR's $4.5 billion acquisition of EDF's renewables. Energy has been a standout sector, with $90.2 billion invested through H1 2026 — on pace for a decade-high — driven by AI-related power demand and grid modernization needs.
3
Legal services increasingly on the radar of PE investors
PE investors have increasingly targeted US legal services in 2026, attracted by its fragmentation, defensive revenue streams, and resilience across economic cycles — making it well-suited for buy-and-build strategies. Many mid-market firms remain untransformed operationally, creating opportunities to drive efficiencies through AI adoption. Capital partner models also enable partners to monetize equity while funding lateral hiring, boutique acquisitions, and regional scaling.
4
Old PE software playbook falling by the wayside as investors shift focus to the AI ecosystem
AI is rapidly disrupting PE's traditional software playbook, prompting firms to mark down legacy SaaS portfolios and shift capital toward AI-native businesses and physical and capital-intensive AI infrastructure — data centers, silicon, and energy. Apollo exemplified this shift in Q2'26, leading a $35 billion capital solution for Broadcom's AI XPU platform with Blackstone, underscoring computing power's emergence as an institutional-grade infrastructure asset class.
5
PE exit value remains solid, despite continued slowdown in exit volume
US PE exit value reached $273.1 billion at H1 2026, but volume remained suppressed at just 508 exits — well below 2025's 1,376 pace — as sponsors held assets rather than accept discounts. Industrial manufacturing led exit value at $100.4 billion, while infrastructure tracked toward a five-year high. TMT exits declined notably as buyers prioritized profitability and defensibility over growth.
Trends to watch for in Q3’26
In Q3’26, US PE investment is expected to be robust but selective, concentrating on larger, high-conviction deals, particularly in AI, data, and energy infrastructure. Exit activity will continue its slow recovery, with secondaries and continuation vehicles remaining essential for providing liquidity.
The resurgence of the middle market is the fundamental engine keeping broad private equity deal flow moving…driven by highly accessible private credit and a long-awaited alignment on valuations. Sellers have adjusted expectations, while buyers are highly motivated to deploy.
Donald Zambarano
U.S. Head of Private Equity, KPMG in the U.S.
Global insights
1
Global PE market sees $1 trillion in investment at mid-year as investors focus on large deals
Global PE investment reached $1 trillion by mid-2026, a solid figure despite a slower pace than 2025. Deal volume, however, fell to a five-year low, highlighting a "flight to quality." Investors are prioritizing fewer, high-value deals, particularly in hot sectors like AI and energy infrastructure, rather than a broad range of smaller transactions.
2
Americas leads PE investment globally, but EMA region sees largest deals in Q2’26
In the first half of 2026, the Americas led global PE funding with $579.1 billion, of which the US accounted for $545 billion. The EMA region followed with $343.2 billion and the ASPAC region with $67.9 billion. While H1 results were soft, rolling twelve-month investment totals grew slightly in both EMA and ASPAC, with EMA also securing three of the quarter's largest global deals.
3
Geopolitical uncertainties continued through Q2’26, causing divergent action across regions
In Q2’26, high geopolitical tensions, including uncertainties around the Strait of Hormuz, drove economic instability. Central banks responded divergently: the European Central Bank raised interest rates, while the Bank of England, US, and Canada held steady. Japan’s rates hit a 30-year high, with other ASPAC nations following. This divergence is unlikely to improve macroeconomic stability.
4
While TMT sees most PE investment, energy and natural resources sector poised for record high
In the first half of 2026, the technology, media, and telecom sector led PE investment with $354.6 billion, followed by industrial manufacturing at $154 billion. The energy and natural resources sector also saw a remarkable surge to $149.1 billion, fueled by geopolitical risks, the energy transition, and AI power demands, putting it on track for a record year.
5
Industrial manufacturing and infrastructure seeing strong exits compared to 2025
By mid-2026, global PE exit value was $576.9 billion. The low exit volume suggests a focus on high-quality deals, leaving unsold company inventory at a record high. Industrial manufacturing led exit value with $223.9 billion and is on track for a 10-year high. Infrastructure and logistics also trended well ahead of last year’s pace.
6
Acquisitions account for strongest exit activity, but US IPO market opening bodes well for future
By mid-year, acquisitions led exits with $262.5 billion, while buyouts contributed $194.8 billion and IPOs $112.6 billion. Sizable US IPOs, like Austria-based data center power generator Innio Group raising $2.4 billion, signal a stronger IPO market that is expected to drive increased global private equity exit activity heading into the second half of the year.
7
PE investors turn attention from software to hardware aligned with industrial manufacturing
AI's disruption of the software sector has caused PE investors to pause and reevaluate their portfolios, slowing investment in the space. This has shifted their focus to hardware, particularly components aligned with industrial manufacturing like sensors, robotics, and semiconductors, to help transform traditional businesses into factories of the future.
Trends to watch for in Q3’26
Global PE investment is expected to remain resilient, focusing on high-quality deals in priority sectors like energy, AI infrastructure, and hardware related to industrial manufacturing. Deal volume will likely stay subdued due to market uncertainty. While a reopening US IPO market may spur some activity, strategic exits will likely remain dominant.
We’ve now… seen a real live example of overreliance on traditional sources of energy. Given this, I think we’re going to see a lot more support for… alternative energy supply, new sources of energy, and climate tech as jurisdictions look to… build more sovereign capacity. This, combined with the power needs associated with AI infrastructure likely means… energy investment [will] go up.
Gavin Geminder
Global Head of Private Equity, KPMG International
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