Private Equity Is Finally Recovering—but Investor Returns Just Hit a Record Low

A new report from Bain & Company has the good news—and the bad.

BY BRIAN CONTRERAS, STAFF WRITER @_B_CONTRERAS_

What’s the point of making a good investment if you can’t get your money back from it?

That’s the question that some investors may be asking as they read Bain & Company’s new Global Private Equity Report 2026, which indicates that although deal and exit values increased in 2025, returns to investors have in fact been record-breakingly sparse.

First, the good news. “The industry’s recovery appears to be gaining traction as more general partners (GPs) shake off economic uncertainty and valuation qualms to put more money to work and speed up distributions to investors,” the report explains, deeming the surge reassuring. Thanks to decreased interest rates and PE funds’ aging cash reserves, it continues, global buyout deal value grew 44 percent to hit $904 billion for the year.

Meanwhile, buyout-backed exit value rose 47 percent to hit $717 billion globally—down from an $850 billion peak in 2021, but still a marked improvement over the sector’s post-pandemic doldrums.

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“Dealmakers managed to find a way around tariff shocks in the spring, persistent geopolitical turmoil throughout the year, and lingering uncertainty about everything from interest rates to economic growth,” Bain continues. Citing the more than $50 billion deal to take Electronic Arts private last fall, the management consulting firm adds: “The urge to put money to work produced some of the industry’s biggest transactions ever.”

Yet the private capital landscape is not all upside. A lot of private equity activity was fueled by a small subset of deals, Bain notes, and—in the part of the report that other media outlets such as Bloomberg and Financial Times were quick to latch onto—PE firms are now making record-settingly low returns to investors.

“The surge in exit value is certainly welcome in terms of addressing the industry’s persistent liquidity conundrum,” Bain reports, “but that capital will take time to work through the system. For now, the amount of cash flowing back to limited partners (LPs) continues to disappoint.”

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