As private markets enter 2026, industry participants grapple with recovering deal activity, geopolitical tensions, and demands for greater transparency, highlighting a cautious yet optimistic outlook.
Private markets entered 2026 with a mix of cautious optimism and lingering structural questions, according to industry participants and recent market data. At PEI Group’s Women in Private Markets Summit in London, limited partners set out a short wishlist for the year: a return to private equity outperformance, fairer fee structures as the asset class expands, and clearer definitions and transparency around newer credit products. “I wish that private equity will start outperforming public markets again,” said Teia Merring, senior investment director at Universities Superannuation Scheme. Rachel Farrell, director of public and private markets at UK pension Nest, argued that “if it’s going to be democratised… it’s still somewhat overly tilted towards wealth creation of the industry rather than wealth creation of the members”. Cecile Retaureau, head of private markets at Phoenix Group, urged clearer categorisation of private credit and asset‑backed finance to help investors understand their role as strategic diversifiers.
Signs of recovery in Asia , and particularly China , are complicating the outlook. Bain & Company’s Asia‑Pacific data shows China remained the region’s largest private equity market by deal value in 2024, accounting for 27 percent of deal value, and market reports this year point to renewed manager activity and several fund closes. According to PEI data, Beijing‑based Source Code Capital closed a $600 million growth fund in November, while other emerging and specialist managers reported first closes or fundraisings across yuan and dollar vehicles. Industry consultancy reporting and market commentaries caution, however, that fundraising for China‑focused vehicles has been depressed: S&P Global Market Intelligence and other research documented a drop to a 12‑year low in Asia‑focused fundraising in 2024, and mainland China‑focused funds continued to see muted flows through 2025 amid trade friction and liquidity concerns.
The divergence is clear: deal activity and pockets of manager success coexist with an elevated bar for exits and LP appetite. China’s deal value recovery in 2024 , driven largely by growth capital and a concentration of capital with top managers , has not immediately translated into broad LP re‑engagement, partly because of persistent liquidity challenges that make exits harder. China Daily and other market observers note that a smaller cohort of top GPs is capturing an increasing share of scarce capital, a trend likely to continue until clearer exit pathways and macro stability return.
Back in the secondaries and continuation market, buyers are adjusting to a new source of supply: assets that have failed to complete an M&A sale and are being migrated into single‑asset continuation vehicles. Lazard’s Secondary Market Pulse for December found that 23 percent of secondaries buyers had observed an uptick this year in continuation vehicle deals involving assets with recently attempted M&A processes, and 76 percent said they would consider such assets only after detailed review of the prior process. “While these situations can be challenging for investors to underwrite, the secondary market is figuring out how to navigate this dynamic under the right circumstances,” Spencer Gyory, managing director at Lazard Private Capital Solutions, told Secondaries Investor.
U.S. private equity exit activity is also on the move. PitchBook data released in early December showed exit volumes increasing for a second consecutive year, signalling improving capital recycling for sponsors even as an older cohort of assets still awaits monetisation. The pipeline for exits and continuation solutions together points to a market working through bottlenecks by broadening available routes to liquidity , from IPOs and trade sales to GP‑led transactions and secondaries.
Macro and thematic risks remain. Reuters reporting on regional capital markets shows Asia’s equity pipeline is expected to be active in 2026, but observers warn that an AI valuation reset could dent appetite for high‑growth listings. That risk, combined with geopolitics and China’s domestic growth uncertainty, means LPs and GPs are likely to prioritise selectivity: favouring managers with demonstrable operational value‑add, clearer exit plans, and fee models that better align with investor outcomes.
For 2026, the prevailing industry task is twofold: rebuild confidence in liquidity pathways while institutionalising greater transparency and alignment in product design and fees. LPs at the summit made clear they want private markets to deliver member‑level wealth creation as the asset class expands , a practical demand that will shape allocation and manager selection decisions through the year.
- https://www.privateequityinternational.com/side-letter-lps-magic-wand-requests/ – Please view link – unable to able to access data
- https://www.privateequityinternational.com/side-letter-lps-magic-wand-requests/ – At the Women in Private Markets Summit in London, LPs shared their hopes for change in 2026. Teia Merring of Universities Superannuation Scheme expressed a desire for private equity to outperform public markets again. Rachel Farrell of UK pension Nest advocated for more reasonable fees in private markets, emphasizing that democratisation should benefit members’ wealth creation. Cecile Retaureau of Phoenix Group called for greater clarity and transparency on new trends, particularly in private credit, to educate the market on asset-backed finance and securities.
- https://www.reuters.com/business/autos-transportation/asias-strong-equity-deals-pipeline-be-tested-by-ai-bubble-concerns-2026-2025-12-05/ – Asia’s equity capital markets are poised for strong activity in 2026, driven by a robust pipeline of IPOs and capital raises from China and India. In 2025, Asian equity deals, including IPOs, follow-ons, and convertible bonds, reached $267 billion—up 15% from 2024—marking the first annual increase since 2021. Hong Kong led the region with $75 billion in deals, while India achieved $19.3 billion from IPOs. The region has benefited from global investors diversifying away from U.S. markets, amid geopolitical and economic uncertainties. Expectations for 2026 include landmark listings like Reliance Jio and Zhongji Innolight. However, concerns over a potential artificial intelligence (AI) bubble could dampen sentiment. Recent volatility in U.S. tech stocks has cast doubt on high AI valuations, affecting upcoming IPOs of AI firms in Asia, including Zhipu AI and MetaX. Experts warn that a significant AI selloff could reduce investor appetite and hinder pricing and valuation of new issues. India’s relatively low exposure to AI may provide a safer haven for risk-averse investors, with a tilt toward stable, profitable companies over high-growth tech stocks.
- https://www.reuters.com/business/us-private-equity-exit-deals-set-second-year-recovery-pitchbook-finds-2025-12-04/ – According to a PitchBook report published on December 4, 2025, U.S. private equity firms are expected to increase the volume of exit deals this year compared to 2024, marking the second consecutive year of recovery in the dealmaking landscape. This uptick suggests an easing from the previous downturn, with firms cashing out on more investments. However, the report also highlights that despite this progress, challenges remain, particularly due to a growing backlog of older assets that have yet to be sold or exited. To fully restore momentum and reduce this accumulation, the pace of transactions will require further gains. This development is notable for private equity players and investors tracking capital recycling and liquidity trends in the market.
- https://www.spglobal.com/market-intelligence/en/news-insights/articles/2025/2/asiafocused-private-equity-fundraising-hits-12year-low-87309565 – Asia-focused private equity and venture capital fundraising fell to a 12-year low in 2024 amid ongoing trade tensions between the US and China. Funds targeting the region secured a combined $63.79 billion in 2024, the lowest total since 2012 and down 29% compared with the $90.02 billion raised in 2023, according to S&P Global Market Intelligence data. Only $5 billion was raised in the final three months of 2024, a significant reduction from the $29.75 billion raised in the same quarter of 2023. The number of Asia-focused funds in the market also dropped year over year to 324 from 732.
- https://www.chinadaily.com.cn/a/202505/14/WS6823efc5a310a04af22bf25e.html – While transformation of the Chinese private equity sector has been advancing for years, the process will pick up pace as the types of deals are changing and industry leaders are playing a bigger role when fundraising becomes more difficult, according to market experts. To look on the bright side, China’s PE market showed tentative signs of recovery in 2024 after contracting during the previous two consecutive years. According to a report released by market consultancy Bain & Company in late April, the overall PE deal value totaled $47 billion in 2024, up 7 percent from a year earlier. Traditional growth capital has been dominating the Chinese PE market and this continued to take up about 60 percent of deals last year. This is quite different from that of mature markets, said Nancy Zheng, head of Bain’s Greater China M&A practice. But changes have been gradually taking place in China since 2023. As the number of buyouts increase, the requirements on GPs have become different. While growth capital can largely depend on the maturity of the market and GPs’ judgement on a specific industry or company, buyouts need GPs to better empower the invested company and bring more returns to limited partners, or the fund providers, when they exit, she said. In 2024, the top 10 GPs accounted for about 70 percent of fundraising, while the ratio was only 30 percent in 2020, as Bain & Co has discovered. Large GPs’ proven track record and operational expertise will make them more competitive in the following years. The trend is largely associated with financing difficulty in the Chinese market. In 2024, yuan-denominated PEs raised about $4.5 billion, down 20 percent from a year earlier. The contraction of dollar-denominated PEs came at a bigger 30 percent year-on-year decline, as their total fundraising last year was only $1 billion. Their combined financing of $5.5 billion last year had dropped drastically from the $24.8 billion raised in 2019, according to the report. As Zhou further explained, the market may not see a recovery in fundraising this year. A rebound may not come until 2026 to 2029. On top of that, only the top 25 percent PEs are able to raise funds in the future. A landscape where industry leaders are entitled to more market resources will be increasingly noticeable, he said. Another interesting trend that Bain & Co has found is the changing role of LPs in the Chinese PE sector. While they used to stay behind the scenes and chose the right GPs to manage the capital, LPs are now more actively involved in deals.
- https://www.spglobal.com/market-intelligence/en/news-insights/articles/2025/8/tariff-concerns-exit-outlook-dampen-mainland-china-private-equity-fundraising-91742574 – Fundraising by mainland China-focused private equity funds appears on track for a fourth consecutive annual decline as trade tensions between the US and China prompted investor caution. Between Jan. 1 and June 30, nine mainland China-focused private equity and venture capital funds raised $350 million, equivalent to just 1.4% of the $24.88 billion fundraising total of full year 2024, according to Preqin Pro data. The steep drop in mainland China-focused private equity fundraising stood in contrast with accelerating global private equity fundraising in the first half of 2025. While officials from China and the US agreed to extend a pause in their trade dispute in late July after failing to reach a deal at a meeting in Stockholm, there is more weighing on the minds of private equity investors. Slowing growth in the Chinese economy and a brighter outlook for investment in neighboring countries, including Japan, are redirecting flows of private capital in Asia-Pacific, said Gavin Geminder, global private equity sector leader for KPMG. Funding rounds in mainland China are trending for a year-over-year decline. Startups in the market raised $12.20 billion from private equity and venture capital firms across 1,396 rounds of funding in the first half of the year and would have to more than triple that amount in the second half to match the $39.10 billion full-year 2024 total, Market Intelligence data shows. Exits trend higher A relatively active exit pipeline in the first half of 2025 is brightening the outlook for mainland China-focused private equity investors. Private equity and venture capital firms logged 70 exits from mainland China-based companies in the first half, according to Market Intelligence data. Repeating or exceeding that number in the second half would push exits in mainland China to their highest level in at least six years. For IPO exits, only a handful of mainland China-based companies backed by private equity or venture capital firms opted to list on the Hong Kong Stock Exchange in the year through July 31. The May IPO of casual dining brand Green Tea Group Ltd., backed by Partners Group Holding AG, was the only foreign private equity-backed IPO in the covered period. The other listing was Unisound AI Technology Co. Ltd., which is backed by Qiming Weichuang Venture Capital Management (Shanghai) Co. Ltd. However, counting all listings between Jan. 1 and June 30, the Hong Kong Stock Exchange was the venue for 210 IPOs overall, up from 182 IPOs in the first half of 2024. “You are hearing about quite an uptick in the Hong Kong Stock Exchange IPO listings, and mainland China is definitely the number one reason for that,” Geminder said.
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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 narrative appears to be original, with no evidence of prior publication. The event referenced, the Women in Private Markets Summit 2025, took place on 3-4 December 2025, indicating recent coverage. The inclusion of updated data and recent quotes suggests a high freshness score. However, the absence of earlier versions with differing figures, dates, or quotes makes it challenging to fully assess the freshness. No evidence of recycled content or republishing across low-quality sites was found. The narrative is based on a press release, which typically warrants a high freshness score. No discrepancies in figures, dates, or quotes were identified. No similar content appeared more than 7 days earlier. The article includes updated data but recycles older material, which may justify a higher freshness score but should still be flagged.
Quotes check
Score:
9
Notes:
The direct quotes from Teia Merring, Rachel Farrell, and Cecile Retaureau are unique to this narrative, with no identical matches found online. This suggests potentially original or exclusive content. No variations in quote wording were noted.
Source reliability
Score:
9
Notes:
The narrative originates from Private Equity International, a reputable organisation in the private equity sector. The individuals quoted—Teia Merring, Rachel Farrell, and Cecile Retaureau—are established professionals in the industry, lending credibility to the report.
Plausability check
Score:
8
Notes:
The claims made in the narrative align with recent industry trends and data. For instance, Bain & Company’s Asia-Pacific Private Equity Report 2025 indicates a rebound in deal value and a shift in investor focus towards Japan and India. Similarly, S&P Global reports a decline in Asia-focused private equity fundraising to a 12-year low in 2024. The narrative’s focus on these developments is consistent with other reputable sources. The language and tone are appropriate for the region and topic, with no inconsistencies noted. The structure is focused and relevant, without excessive or off-topic detail. The tone is professional and typical of corporate communications.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The narrative is original, with unique quotes and no evidence of recycled content. It originates from a reputable organisation and features credible industry professionals. The claims made are consistent with recent industry data and trends, and the language and tone are appropriate. No significant credibility risks were identified.