Private Equity Pulse 2026: From setbacks to comebacks: UK PE reveals its adapt to win strategy (Grant Thornton)

Summary

• In a survey of PE professionals, 70% of respondents plan to increase their investment levels in 2026.p.5
• A majority (58%) of UK private equity firms reported that fundraising has become more challenging than 12 months ago.p.6
• Mid-market deal activity accelerated in H2 2025 with volumes up 7% compared to H1, although overall 2025 deal volumes were 7% below 2024.p.12
• US investor participation in UK private equity deals reached 32.6% in the first 11 months of 2025, up from 23.4% in 2015.p.17

Key insights

1. 72% of UK PE respondents agreed that AI adoption within their firm was 'more hype than impact'.p.3
2. UK Private Capital estimates that UK private equity funds hold a £190bn stockpile of dry powder.p.3
3. Sector specialism was cited by 28% of UK respondents as the single most effective way to stand out during the next fundraising cycle.p.7
4. 58% of UK respondents identify digital enablement and technology upgrades as a key value creation lever for portfolio companies.p.9
5. Roughly 40% of private equity firms are utilizing continuation vehicles to retain high-performing assets while delivering liquidity to existing LPs.p.11
6. 44% of UK respondents named real-time portfolio monitoring as the top innovation likely to disrupt traditional PE operating models.p.15
7. Financial services, technology, and professional services are identified as the top three sectors with the most potential in 2026.p.16
8. The FTSE 100 gained 21.5% from the last trading day of 2024 to December 31 2025, signalling improving equity market valuations.p.20