A new survey by Bain & Company and StepStone Group reveals private equity firms are prioritising operational gains, co-investments, and innovative liquidity strategies as traditional valuation growth stalls in 2026.
According to Bain & Company and StepStone Group, buyout general partners are entering 2026 with a sharpened emphasis on operational improvement, a persistent appetite among limited partners for co-investments and a rising reliance on the secondary market as a liquidity management tool. The firms published findings from their inaugural GP Outlook, a survey of more than 100 investment and investor-relations professionals conducted between December 2025 and January 2026, primarily across North America and Europe.
The report paints a market in which traditional multiple expansion can no longer be relied upon to lift returns, forcing sponsors to prioritise repeatable sourcing, early identification of value levers and rapid execution. Price disagreements were the most common reason cited for deals falling apart in 2025, outweighing typical diligence friction and macroeconomic uncertainty, the survey found.
Continuation vehicles are now a routine element of the toolkit. Roughly a quarter of respondents said they had recently launched or completed a continuation vehicle, and about 40% expect to consider one within the next year or two, principally to return capital to investors and manage longer hold periods. That trend aligns with broader industry analysis from PwC, which notes that companies are staying private for longer and that continuation funds, secondaries and preferred equity structures are reshaping exit pathways.
Fee compression and investor concessions are reshaping fund economics. The Bain–StepStone survey reports that about one-third of GPs offered scale or early-bird discounts when raising their most recent flagship funds. At the same time, general partners continue to favour co-investments for investors able to deploy capital quickly at scale, reinforcing demand for bespoke allocation mechanisms.
Artificial intelligence is being woven into deal teams’ workflows, with the largest upside observed in sourcing and due diligence. Within portfolio companies, however, the financial impact of generative AI is less universally anticipated; nearly 40% of surveyed GPs do not expect material balance-sheet benefits from AI in 2026. McKinsey’s 2026 Global Private Markets Report similarly emphasises operational value creation and reports that a majority of limited partners rank a GP’s value-creation plan among the top criteria for manager selection, while noting that AI is prompting sponsors to reassess portfolio positioning and exit choices.
Bain’s global private equity chair reflected that the industry has reached an inflection point. “Multiples aren’t doing the heavy lifting anymore and new deals are harder to pencil out. In this environment, alpha has to be earned operationally and that requires sharper strategy, better data, and real execution discipline,” Hugh MacArthur said.
StepStone’s head of private equity and the firm’s survey lead highlighted the twin pressures of valuations and liquidity. “This survey highlights how GPs are adapting to an ever-evolving investment environment,” Lindsay Creedon said. “While expectations around exits improved coming into 2026, valuations remain a key obstacle in diligence processes. A focus on driving returns through operational value creation, including the impact of AI, is paramount. In addition, liquidity remains top of mind, so the secondary market will remain an important portfolio-management tool for GPs and LPs alike.”
Industry advisers warn that tax and regulatory considerations are increasingly central to limited partners’ choices around continuation structures and secondaries. PwC’s outlook underlines that nearly half of asset managers are already using continuation funds to unlock liquidity and stresses the need to factor tax consequences into portfolio-management decisions.
Taken together, the reports suggest private equity in 2026 will be defined less by financial engineering and more by disciplined operational playbooks, targeted technology adoption and flexible liquidity solutions as sponsors and investors adapt to a market with tighter valuation dynamics.
- https://www.manilatimes.net/2026/03/02/tmt-newswire/globenewswire/bain-company-and-stepstone-group-release-2026-private-equity-gp-outlook/2291238 – Please view link – unable to able to access data
- https://www.mckinsey.com/industries/private-capital/our-insights/global-private-markets-report – McKinsey’s 2026 Global Private Markets Report highlights the significant role of operational value creation in private equity, noting that 53% of 300 limited partners ranked a general partner’s value creation strategy among the top five criteria for manager selection. The report also discusses the impact of artificial intelligence (AI) across the ownership life cycle, emphasizing that AI is prompting sponsors to reassess their portfolios and investment strategies, leading to more decisive actions on where to invest, reposition, or exit.
- https://www.pwc.com/gr/en/advisory/deals/trends/private-equity.html – PwC’s 2026 Private Capital Outlook discusses the evolving landscape of private equity, focusing on the increasing use of continuation funds, secondary transactions, and preferred equity deals as portfolio companies remain private longer. The report also highlights the growing importance of AI in reshaping how private capital firms evaluate investment opportunities and position portfolio companies for long-term growth, with AI becoming integral in assessing targets and planning value creation.
- https://www.pwc.com/us/en/services/tax/library/2026-private-capital-outlook.html – PwC’s 2026 Private Capital Outlook examines the trend of portfolio companies staying private longer, leading to the reshaping of exits through continuation funds, secondary transactions, and preferred equity deals. The report also highlights the growing importance of tax considerations in limited partners’ investment decisions, with nearly half of asset managers already using continuation funds to unlock liquidity.
- https://www.pwc.com/us/en/services/tax/library/2026-private-capital-outlook.html – PwC’s 2026 Private Capital Outlook examines the trend of portfolio companies staying private longer, leading to the reshaping of exits through continuation funds, secondary transactions, and preferred equity deals. The report also highlights the growing importance of tax considerations in limited partners’ investment decisions, with nearly half of asset managers already using continuation funds to unlock liquidity.
- https://www.pwc.com/us/en/services/tax/library/2026-private-capital-outlook.html – PwC’s 2026 Private Capital Outlook examines the trend of portfolio companies staying private longer, leading to the reshaping of exits through continuation funds, secondary transactions, and preferred equity deals. The report also highlights the growing importance of tax considerations in limited partners’ investment decisions, with nearly half of asset managers already using continuation funds to unlock liquidity.
- https://www.pwc.com/us/en/services/tax/library/2026-private-capital-outlook.html – PwC’s 2026 Private Capital Outlook examines the trend of portfolio companies staying private longer, leading to the reshaping of exits through continuation funds, secondary transactions, and preferred equity deals. The report also highlights the growing importance of tax considerations in limited partners’ investment decisions, with nearly half of asset managers already using continuation funds to unlock liquidity.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The article references a report released by Bain & Company and StepStone Group, dated March 2, 2026. However, the earliest known publication date of similar content is March 3, 2025, when Bain & Company published their ‘Global Private Equity Report’ titled ‘This Time It’s Different: The Strategic Imperative in Private Equity’. ([bain.com](https://www.bain.com/insights/strategic-imperative-in-private-equity-global-private-equity-report-2025/?utm_source=openai)) This suggests that the current article may be based on recycled content from the previous year’s report. Additionally, the article mentions a survey conducted between December 2025 and January 2026, which aligns with the publication date of the article, indicating that the content is relatively fresh. However, the reliance on a prior year’s report raises concerns about the originality of the current article.
Quotes check
Score:
7
Notes:
The article includes direct quotes from Hugh MacArthur, Bain’s global private equity chair, and Lindsay Creedon, StepStone’s head of private equity. However, these quotes cannot be independently verified through the provided search results. Without access to the original sources or recordings of these statements, the authenticity of these quotes remains uncertain. This lack of verifiable sources diminishes the credibility of the quotes presented in the article.
Source reliability
Score:
6
Notes:
The article is published on The Manila Times website, which is a known news outlet. However, the specific article is hosted on GlobeNewswire, a press release distribution service. This suggests that the content may originate from a press release issued by Bain & Company and StepStone Group. Press releases are often promotional and may lack independent verification, raising concerns about the objectivity and reliability of the information presented.
Plausibility check
Score:
8
Notes:
The article discusses trends in private equity, such as the emphasis on operational improvement, the use of continuation vehicles, fee compression, and the integration of artificial intelligence into deal teams. These topics are consistent with industry discussions and align with Bain & Company’s previous reports. However, the reliance on unverified quotes and the potential recycling of content from prior reports raises questions about the originality and freshness of the information presented.
Overall assessment
Verdict (FAIL, OPEN, PASS): FAIL
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The article presents information that appears to be based on recycled content from a prior year’s report, includes unverified quotes, and relies heavily on a press release from the companies involved. These factors significantly undermine the originality, freshness, and reliability of the content, leading to a FAIL assessment.