PE buyout activity fell sharply in the first quarter of 2026, as dealmakers grappled with uncertainty in technology markets and geopolitical tensions. Firms completed acquisitions worth $172bn in Q1, a 36% decline from the previous quarter and an 8% drop from the same period last year, according to Dealogic.
Industry insiders point to several factors behind the slowdown. The Gulf conflict, which began at the end of February, has created market turbulence, prompting some firms to delay signing new deals. Meanwhile, concerns over the disruptive impact of artificial intelligence on software companies — a key focus area for buyouts — have dampened enthusiasm.
The buyout sector has faced headwinds since 2022. Companies acquired during the prior decade of low interest rates are proving difficult to exit amid rising borrowing costs and ongoing geopolitical instability.
Fundraising showed relative stability, with private equity funds globally raising $86bn in Q1 2026, slightly below the same quarter last year. PitchBook data highlights that 2025 was the weakest fundraising year for the sector since 2018, underscoring the challenges facing the industry.
