The State of Private Equity 2027

Executive summary preview

Private equity's returns now have to be earned. The clearest shift is towards measurable operating improvement, stronger technology diligence and auditable portfolio reporting, because the old return engine of cheap debt and rising multiples has stalled.

In the 2010s, about 5% annual EBITDA growth delivered a 2.5x return. With 8 to 9% debt and record entry multiples, the same outcome now needs 10 to 12%. Meanwhile cash back to investors has stalled, with distributions at 14% of NAV.

The bottom line: underwrite operating change you can measure, diligence you can defend and data you can audit.

Key findings

• The return engine has changed: leverage and multiple expansion drove 59% of buyout returns in 2010 to 2022.
• Liquidity is the binding constraint: holding periods are about seven years and 32,000 companies remain unsold, while secondaries hit a record $121bn in H1 2026.
• Execution capacity is the bottleneck: 68% of PE professionals rely on external advisers for value creation.
• Diligence must look beneath the code: open source appeared in every audited M&A deal, with licence conflicts in 94%.
• Controls are becoming deployment costs: machine identities outnumber humans 109 to 1.

Research figures

10–12%

annual EBITDA growth now needed for a 2.5x return

14%

distributions as a share of NAV, lowest since 2009

94%

of audited M&A deals had open-source licence conflicts

The ten trends

1. Portfolio programmes need execution partners
2. Value creation targets operational bottlenecks
3. Technology provenance enters diligence

7 more items fully covered in the report.

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