Private equity's share of M&A falls to a 10-year low

M&A is coming back, but not for private equity. Insurance AUM Journal's midyear outlook, written by David N. Miller, global head of private credit and equity, shows buyout values flat to slightly down in the first half. Total announced deal value rose 17% year to date.

The jump follows a 44% surge in 2025. Miller had extrapolated 16% growth at the start of the year, and the recovery is running well ahead of that. He attributes the strength to mega-transactions by corporate buyers, supported by a more permissive antitrust environment. Middle-market volumes, by contrast, have grown only modestly.

Private equity's share of M&A has fallen below 31% for the first time in a decade. For an asset class that appears on nearly half of all deals, either as buyer or seller, that is a sharp retreat. For insurers, it means dry powder keeps building, exits and distributions are delayed, and deployment runs behind buying power.

Miller expects that recovery to broaden into small and mid-sized markets once macro volatility subsides and inflation and rate certainty improve. He calls it a matter of when, not whether. For general-account investors deciding where to place new commitments, the timing of that broadening determines whether capital sits idle or gets to work.

The bright spot is late-stage growth. Capital is flowing to private companies valued above $1 billion. These companies have raised six or more venture rounds. Such deals now account for 74% of all proceeds raised year to date. Over the previous decade, the comparable figure was 25%. A new generation of unicorns is scaling revenue quickly, many of them leading on AI or adopting it to accelerate earnings.

For general accounts, the category deserves attention. Late-stage growth sits closer to buyout risk than early-stage venture, and it offers a way to participate in the AI buildout without taking concentrated public-equity exposure. But the concentration also suggests a crowded trade. Sponsors chasing the same companies will likely cap returns, and underwriting discipline on cash flow and valuation matters more as the cycle matures.

Miller sees the foundation for a multi-year recovery firmly in place. The next phase, he says, depends less on direction than on breadth. The practical move is to match commitments to where the activity actually is. Generalist buyout funds may see slower deployment, while late-stage growth and secondary opportunities could absorb capital sooner. That argues for a more selective allocation approach in the coming years.