Private equity

20 August 2026, 21:00 UTC Chief Investment Office GWM Investment Research

Private equity CIO View: Private equity Karim Cherif, Head Alternative Investments, UBS Switzerland AG Richard Huang, CAIA, Private Market Strategist, UBS AG Hong Kong Branch Antoinette Zuidweg, Alternative Investments Strategist, UBS Switzerland AG

• We remain constructive on private equity (PE), supported by attractive 1H26 PE fundraising already more than valuations, resilient fundamentals, and a gradual recovery in deal- 60% of FY25 total making. Global private equity fundraising, in USD billions

• At the same time, selectivity remains essential. We favor managers with strong value-creation capabilities, particularly those with experience in complex transactions such as carveouts and divestitures, and those able to capitalize on opportunities created by valuation resets.

• We also recommend broadening allocations beyond the technology sector and the US market, while maintaining a positive view on secondaries for greater returns visibility and defensive exposure.

Note: As of 30 June 2026. Source: PitchBook, UBS August 2026. Private equity in the current environment The macroeconomic backdrop remains broadly supportive. Recent macro data and corporate earnings continue to point to a resilient global economy, while the latest US inflation data, combined with signs of slower Gradual recovery in deal-making labor market momentum, weaken the near-term case for additional Federal Global private equity deal value, in USD billions, and Reserve rate hikes. deal count (trailing 12-months)

Private equity was relatively resilient through first-quarter market volatility, with global PE returning -1% in 1Q26 versus a 4% decline for the S&P 500. That said, 1Q performance data are backward-looking and do not capture the subsequent public markets rebound. Meanwhile, fundraising trends have also shown improvements. Global PE fundraising reached USD 262 billion in the first half of 2026, equivalent to more than 60% of the full-year 2025 total. Asia Pacific has been the strongest region, with 1H26 fundraising 30% above the full-year 2025 level, while the US and Europe are also tracking ahead of last year’s pace.

Deal activity remains uneven. Conflicts in the Middle East, rate-market Note: Includes growth and buyout transactions. As of volatility, and concerns around AI disruption have weighed on momentum, 30 June 2026. Source: PitchBook, UBS August 2026. with larger transactions delayed and software deals subject to greater scrutiny. Trailing 12-month PE deal value was broadly flat for a second consecutive quarter, although overall deal value remains elevated and deal count growth improved from 6% in 1Q26 to 9% in 2Q26. These trends point to a gradual recovery in deal-making. The outlook should improve if macro uncertainty continues to ease and expectations for Fed rate cuts remain intact. At the same time, recently announced and speculated large-cap transactions involving PayPal and Workday are encouraging developments, underscoring that appetite to transact remains intact.

This report has been prepared by UBS Switzerland AG, UBS AG Hong Kong Branch. Please see important disclaimers and disclosures that begin on page 5.

There are also early signs that deal activity is broadening out. Europe’s share Constructive view on PE, supported by of trailing 12-month global PE deal value increased from 31% in 2Q25 to attractive valuations 35% in 2Q26, suggesting that momentum is not limited to the US. Activity Public equity multiples versus global buyout purchase has also extended beyond mega-cap transactions into parts of the middle price multiples market, while sector leadership appears more balanced. Technology, and software in particular, is no longer dominating activity to the same extent, with greater interest in energy and hard-asset-linked sectors such as materials, chemicals, and industrials. We view this broadening as a healthy and necessary condition for a more sustainable recovery in M&A activity.

Private company fundamentals remain solid. In 1Q26, the median buyout company delivered 6% revenue growth and 8% EBITDA growth, broadly in line with 2025 levels. Beneath the…