Private Equity & Growth Investing

The current state

as of

Private equity and growth investing in 2026 is operating in a more functional but structurally different market: rates are off their peaks, dealmaking is recovering, but returns depend less on leverage and multiple expansion than on operational execution, AI-enabled diligence, and disciplined exits. Practitioners are also adapting to private credit’s central role, continuation vehicles and secondaries as standard liquidity tools, and regulatory/product shifts that broaden private-market access while increasing governance complexity.

What’s shaping Private Equity & Growth Investing right now

  • Operational value creation has overtaken financial engineering as the main return driver, forcing deal teams to underwrite pricing, productivity, talent, and AI levers before signing.
  • Private credit has become core deal infrastructure, changing financing workflows through bespoke unitranche, NAV loans, and lender-led structuring rather than syndicated-bank standardization.
  • DPI pressure from LPs is reshaping portfolio management, making exits, recaps, continuation vehicles, and liquidity planning central to day-to-day investment decisions.
  • Sector specialization is intensifying around AI, healthcare, energy transition, and infrastructure-like assets, because generic generalist underwriting no longer produces differentiated entry angles.
  • Retail and defined-contribution access to private markets is expanding, pushing firms toward evergreen vehicles, tighter disclosures, and operating models built for semi-liquid capital.

Skills on the rise and in decline

Rising

  • Value-creation underwriting

    It is becoming more important as ICs increasingly demand executable alpha plans that translate diligence into sequenced 100-day and multi-year operating plans with KPI ownership.

  • Capital-structure engineering

    It is increasingly important across private credit, continuation funds, and secondaries because liquidity and financing flexibility are now key drivers of outcomes.

  • AI disruption judgment

    As templated analytics and AI reduce the scarcity of pure manual LBO modeling, greater judgment is needed to assess AI disruption, sector dynamics, and management quality.

This week’s brief

Earlier briefs

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Tracked trends

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  • Financing Screen Tightens — Deal teams are treating financing terms as part of asset quality, with lender appetite and downside resilience now shaping which opportunities make it to IC.
  • Continuation Vehicle Expansion — Moonfare’s participation in Osaic’s $2 billion continuation vehicle highlights how GP-led liquidity deals are becoming larger, more common, and more widely financed.
  • WhatsApp Deal Workflows — Underwriting and diligence software is evolving from review tools into AI systems that draft the first pass of deal work, compressing cycle times and raising the value of judgment.
  • Secondary Liquidity Pricing — Managers are competing on wrapper design as much as on underlying assets, using evergreen, ETF, and tokenized structures to make private markets easier to buy, hold, and distribute.
  • AI in Core Systems — AI is moving into the core systems private capital teams already use, automating reporting, analysis, outreach, and compliance from within the workflow.

Deep dive

What macro trends are shaping private equity and growth investing in 2026?
In 2026, private equity and growth investing are being shaped by a more stable rate environment, which is improving financing conditions and reopening deal and exit activity. At the same time, the asset class is maturing, so firms are relying less on leverage and multiple expansion and more on operational value creation, AI adoption, and stronger portfolio management. Private credit and more flexible liquidity tools are becoming more important as firms manage longer hold periods and more complex capital structures. Regulation, democratization of private markets, and big structural forces like AI, decarbonization, demographics, and geopolitics are also influencing where capital goes and how firms operate.
What new methods are shaping private equity and growth investing in 2026?
In 2026, leading private equity and growth investors are increasingly using flexible capital structures such as continuation funds, evergreen vehicles, and hybrid funds to manage longer hold periods and provide liquidity. Operational value creation is becoming the main source of returns, with firms building repeatable playbooks around pricing, procurement, talent, and digital transformation, including AI-enabled workflows. Secondaries, co-investments, and GP-led transactions are now part of active portfolio management rather than just exit tools, helping managers rebalance risk and extend ownership of strong assets. Private credit is also playing a larger role in deal financing, giving sponsors more ways to structure transactions and support growth.
How has private equity work changed in the last six months?
In the last six months, private equity and growth investing have become more focused on realized returns, with DPI carrying more weight than paper IRR in fundraising and performance discussions. AI has moved from a broad theme to a practical diligence and portfolio value-creation filter, especially in software and tech investing. Deal activity has concentrated into fewer, larger transactions, so teams are spending more time on deeper underwriting, tighter exit planning, and more selective capital deployment. With exits still constrained, continuation vehicles, secondaries, and private credit are playing a bigger role in liquidity and deal execution.
What skills matter most in private equity and growth investing in 2026?
In 2026, private equity and growth investing are placing more value on operational value creation, AI and data fluency, and sector specialization. Practitioners are expected to build and execute concrete improvement plans for portfolio companies, use data to source and assess deals, and work effectively with digital and analytics teams. Strong commercial judgment, the ability to diagnose business performance quickly, and comfort with technology-enabled workflows are becoming more important. By contrast, purely spreadsheet-driven modeling, generic deal execution, and narrative-heavy IRR pitching are losing relative importance.
What tools and technologies are reshaping private equity in 2026?
Private equity and growth investing teams are increasingly using AI-enabled research, market-intelligence platforms, and deal-CRM systems to speed sourcing, screening, diligence, and pipeline management. They are also adopting web data extraction and alternative-data tools to map markets more efficiently, along with portfolio monitoring software that tracks KPIs and flags operational issues across holdings. A growing category is secondaries and continuation-vehicle infrastructure, which supports liquidity management as exits remain constrained. In 2026, the biggest shift is toward integrated, AI-assisted operating systems that connect the full investment lifecycle from sourcing through exit.
What developments signal major shifts in private equity and growth investing?
Major shifts are developments that change how capital is raised, deployed, and exited for years at a time, such as the migration of value from public to private markets, the rise of private credit and secondaries, and the growing influence of sovereign wealth funds and retail-access vehicles. Technology changes, especially AI, are also structural when they reshape target-company economics, due diligence, and portfolio operations. By contrast, short-term swings in deal volume, IPO windows, or quarterly fundraising are usually cyclical noise rather than a lasting change in strategy.

This week’s Private Equity & Growth Investing openings

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