Inside the Strategy Room 293. Private equity 2026 outlook: Clearer view, tougher terrain
37 snips
Mar 4, 2026 Rahel Schneider, McKinsey partner focused on fundraising and investor relations. Christopher Croke, London partner advising PE on investment strategy and operations. Alex Edlich, senior partner leading private capital strategy. They discuss 2025’s rebound and structural shifts, record entry multiples and longer holds, the rise of scale and specialization, embedding AI across portfolios, and changing fundraising dynamics and capital pools.
AI Snips
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Explicitly Underwrite AI Impact In Due Diligence
- Underwrite AI impact explicitly as part of price and downside scenarios when paying elevated multiples.
- Ask whether AI can bend cost curves, reposition the company, and to whom the value accrues before paying near-12x EBITDA.
Exit Backlog Increased Even As Exit Value Rose
- Exit backlog is at a two-decade high despite higher exit value driven by larger IPOs.
- Exit count fell 15% while exit value rose 40% to $1.2tn, and the backlog reached ~16,000 companies.
Move Value Creation Earlier And Make It Continuous
- Shift from late-stage value-creation sprints to sustained, earlier operational work across ownership.
- Operating teams doubled in size and are engaging earlier with specialized functional experts to drive revenue and margin expansion.