2026 Private Equity Outlook (CVC Capital Partners)

Summary

• Average market volatility in 2025 reached its highest level since 2022, driven by tariff developments and geopolitical tensions.p.2
• Inflation moderated, labour markets remained relatively firm and central bank policy became more accommodative, easing financing conditions.p.2
• In Europe, supportive fiscal policy helped sustain economic momentum while demand for private capital strengthened steadily.p.2
• Global deal activity strengthened in the second half of 2025 as financing conditions improved, with Europe performing particularly well.p.3
• European buyouts typically trade at lower valuation multiples than those in the US.p.3
• Outcomes are increasingly shaped by value creation rather than leverage or multiple expansion, favouring experienced managers with deep local origination.p.4

Key insights

1. Resilience was the defining theme of 2025, despite early caution.p.2
2. An uncertain setting reinforces the importance of selectivity, with Europe offering diversification and relative value.p.2
3. ECB policy rates appear to have reached equilibrium and remain below those of the Fed, improving financing visibility.p.3
4. Europe's market is more fragmented, with transactions more frequently bilateral than auction-led, which supports more disciplined entry pricing.p.3
5. The US private equity market is deeper and more consolidated, with consistently competitive auction dynamics that tend to drive higher valuations.p.3
6. European private equity enters 2026 on firmer footing, supported by improving macro visibility and a measured recovery in deal activity.p.4
7. For private wealth investors, European private equity potentially offers relative value, diversification and long-term opportunity.p.4