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2026 Global Private Equity Outlook: Signs of a Gradual Thaw · Committed Capital

• 0:09
  Intro: Welcome to Dechert's Committed Capital, where private equity leaders open their playbooks to discuss today's trends.
• 0:18
  Maria Tan Pedersen: Hello, my name is Maria Tan Pedersen, and I'm co-head of Dechert's Emerging Markets practice based in Singapore in July of 2025, Mergermarket, on behalf of Dechert, surveyed 100 senior-level executives with private equity firms around the world having assets under management of US$2.5 billion or more, and which were not first-time funds. The results of this survey form the basis of our 2026 Global Private Equity Outlook study. Today, we will discuss in greater detail the market observations and the outlook for 2026. I'm delighted to be joined today by my Dechert partners, Markus Bolsinger, Sabina Comis and Nick Tomlinson, along with PE industry leaders from around the world. We have Sujoy Bose, CEO, Investment Management, from Everstone. We have Dan Harknett, partner at Ridgemont Equity Partners, and we have Daniel Lopez-Cruz, Global Head of Private Equity at Investcorp. Thank you all for joining our panel today.
• 1:31
  Maria Tan Pedersen: The first topic I'm going to turn to is going to be the one on top of everyone's minds, which are challenges and opportunities. As we close out the year, private equity dealmakers have successfully navigated a challenging macroeconomic environment, amidst tariff volatility, geopolitical uncertainty, with buyout values making double-digit gains year on year.
• 1:53
  Maria Tan Pedersen: This increase in the context of an unpredictable global economy is a testament to PE's resilience and creativity, yet there are challenges facing the industry. The liquidity cycle is a key strand that runs through this year's report - the continuing reluctance of buyers and sellers to come to the table and transact. Looking forward, we expect the deal activity will continue to increase, but we expect a gentle thaw rather than everyone jumping in at the same time. So Daniel, if I may turn to you first, as a pioneer in private equity since as early as 1982, which is around the time that Dechert had started its own private equity practice, Investcorp has deep experience through market cycles and sees the industry through a global lens. Where do you think the greatest challenges and the greatest opportunities lie for the alternative asset management industry in general, and PE in particular, as we head into next year?
• 3:00
  Daniel Lopez-Cruz: Thank you, Maria, and thanks for having me.
• 3:03
  Daniel Lopez-Cruz: I think, without any doubt, the greatest challenge that the industry is facing is on exits, which is well known to everybody in this call and everybody listening. We are dealing with a circular economy, with a circular system where you need to have exits, you need to return capital to your LPs, then those LPs will recirculate that capital into new funds. These new funds will be deployed, and the wheel keeps on moving.
• 3:28
  Daniel Lopez-Cruz: Unfortunately, we have had, as you said, a very slow pace of exits. This is something that is going to take a number of years, probably, to normalize itself, and is the main challenge.
• 3:40
  Daniel Lopez-Cruz: A couple of figures, just to put all of this in context - and these figures, I believe, come from Bain. The assets under management in the private equity buyout space have tripled over the last 10 years. They were around US$1.5 trillion in 2015 and they are going to end up around US$4.7 trillion this year. The level and the value of exits in the private equity buyout space is pretty much the same as 10 years ago. So, you have an industry that has tripled in size in terms of funds committed to private equity buyouts,with a similar level of value of exits as 10 years ago. So that, I think, exemplifies clearly the challenge of the industry. Now, the opportunities that we face will be the other side of the challenge. The opportunities will be available to those that are able to recognize that we are in a different time from the times before COVID. The times before COVID were characterized by, I would say, higher growth, lower interest rates or zero interest rates and multiple expansion. We benefited from multiple expansion from 2009 all the way to COVID. All of these drivers basically have ceased to be applicable to the same extent as we speak. So, the opportunities are going to be around accepting that the times have changed and that we need to do business differently. And that is going to be around driving traditional levers of value creation harder and faster, and then driving new levers of value creation. I think people that succeed in this environment are going to have to be less gradual and much more transformative in what they intend to do to the portfolio companies in which they take control. And that means that we will have to be much more active, much more assertive in the way we direct companies from the board. And this is an opportunity, because the people that are able to do that, I think, will thrive. The ones that don't will find it very, very difficult to continue to be in business in the long run.
• 5:47
  Maria Tan Pedersen: Thank you, Daniel. Very, very insightful.
• 5:50
  Maria Tan Pedersen: Dan, if I may ask, Ridgemont recently closed its fifth private equity fund at its hard cap of nearly US$4 billion in commitments. First, congratulations on the successful capital raise. But what does this successful closing amidst the challenging fundraising environment tell you about your investor partner's trust in your investment approach and strategy, and how do you plan to put that strategy to work this coming year?
• 6:19
  Dan Harknett: Great, thanks. And I'm excited to be here today.
• 6:22
  Dan Harknett: We're incredibly proud to have closed fund five at nearly US$4 billion, particularly as you noted, in what's been a very challenging fundraising environment. To us, this close is a strong validation of our long-term track record, the consistency of our investment philosophy and the deep trust our limited partners have placed in the Ridgemont platform. We've been in business for over 30 years, dating back to Bank of America in the early '90s, and we've differentiated ourselves as really a preferred partner, leading growth-oriented services and distribution businesses across three sectors: business services, healthcare and industrials. And that consistency of focus, combined with a data-driven approach that we utilize, has really helped us identify opportunities where we can be true value-added partners to our portfolio companies. I think our investors recognize that our strategy works because we're very grounded in alignment.
• 7:18
  Dan Harknett: We're a 100% partner-owned firm with a very meaningful GP commitment, and use a one-firm culture across the company that utilizes great collaboration across everyone. That alignment translates into not only how we work with our investors, but our management teams and how we ultimately drive outcomes and results across the portfolio. As I look ahead, we'll continue to build on the themes that have defined our success, applying a subsector-focused mindset - we're very specialist by nature- and remaining flexible and disciplined in this evolving market that Daniel just talked about. This new fund gives us an opportunity to pursue additional investments where we can bring the full strength of the firm to bear and, ultimately, this fundraise reaffirms that our LPs not only value our performance, but also our unique culture, one that genuinely supports the Ridgemont family and reflects the integrity and collaboration that has defined our firm since the '90s.
• 8:16
  Maria Tan Pedersen: Thank you, Dan, and congratulations again.
• 8:20
  Maria Tan Pedersen: Sujoy, appreciating that you wear many hats at Everstone, spanning capital raising, deal sourcing and impact initiatives, what are you seeing as the most promising opportunities for Everstone's US$8 billion platform, and in which areas are you focusing your and your team's attention as we head into 2026?
• 8:43
  Sujoy Bose: Maria, first of all, thanks to you and to Dechert for having me on this panel. It's really interesting to be on a panel with such diversity. It's amazing. And I know we've joined from different parts of the world, which just shows, despite what's happened in the last year and a half, how the world is converging in so many ways.
• 8:59
  Sujoy Bose: Everstone operates in multiple asset classes. So, we have a private equity business, and we just had a first close of our fund five. In real estate, we are actually investing the fifth fund. We have a climate business, which is more of a climate infrastructure business, where we are just about to launch fundraiser fund two. We have a data center business, I would say, a data and AI kind of a platform where we've just acquired back from our partners our data center business in India. And, finally, we also have a venture capital fund.
• 9:34
  Sujoy Bose: We operate in many different parts of the Indian economy. And the way I would put it is, as any of you who have visited India knows, India needs more of everything. It's already the fourth-largest economy, which is about to become the third-largest economy in the world, and it's growing. This quarter, it had 8.2% GDP growth.
• 9:52
  Sujoy Bose: India is going to create an economy the size of Germany over the next decade. So, there's a lot to do, and our approach is to focus on execution within our areas of focus. So, all these aspects ... so we are fundraising, we are investing, we are exiting, and we are actually also always looking at new ideas that come across the table. And the interesting thing is the experience in India in PE, in real estate and infrastructure, has been quite different from what we heard from some of our other panelists. Last year, we invested about US$40 billion in PE. We exited US$33 billion in the country. Sixty percent of those exits were through public markets, and you also see it from the work that Everstone does. We were one of the first control investors in India, in the PE markets. We've remained control investors. We control everything that we operate in.
• 10:53
  Sujoy Bose: Either we control it ourselves, or we co control it with a partner, and we focus on buying companies. We'll also buy companies in the U.S. We'll buy companies in Europe and Southeast Asia. We look at the world with the hats of India demand and India supply. So, some of the companies we buy have an India demand angle, and some of the companies we buy have an India supply angle. And the idea is to completely transform the cost base, the demand, the distribution, sort of aspects of all these companies, and grow EBITDA significantly so that from the time we buy to the time we sell, which is about four to six years, we can actually exit at a completely different level. So, that's what we do, and we operate in a very exciting part of the world. So, I at least have some positive news to bring to the table over here.
• 11:49
  Maria Tan Pedersen: And I think what you're saying there is also borne in our report. India is one of the great bright spots in APAC from the results of this year's survey, and certainly your commentary about our global panel and the fact that we are really a connective world in private equity is, I think, testified by everyone who's on the screen today. But let me then turn to the question of risk, because with challenge and opportunities, we have to talk about risk. And building on the challenging macroeconomic backdrop that we're all aware of in 2025, geopolitical conflict was cited by almost half of all survey respondents as a factor expected to have the biggest influence on the deal environment in the next 12 to 18 months. Another risk emphasized in the report was stabilizing portfolio company costs, with 60% of respondents citing it as one of the biggest issues facing the asset class. The availability and cost of leverage was also a major concern, cited by 58% of respondents, including 67% of those based in North America.
• 13:00
  Maria Tan Pedersen: Daniel, as a global manager of alternative investments, Investcorp has a unique vantage point regarding geopolitical risk. How has Investcorp been able to manage these risks in 2025 and on a go-forward basis?
• 13:19
  Daniel Lopez-Cruz: The way we have handled this is through very wide diversification. We have, at the moment, eight different private equity groups operating across the globe. And what we have found in these last few months, as is often the case, that should come as a surprise to anybody, is that when you have an unexpected hit, whether that is tariffs, whether that is something else, different portfolios in different parts of the world basically react differently. So, in this particular case, what we have found is that our portfolios in the emerging markets have been less affected by, for instance, tariffs, and it has to do with the type of sectors that we invest in in emerging markets, and some companies in the U.S. have been affected. But when you look at everything, sort of, as a whole, we have around 80 portfolio companies in our global private equity franchise, you see the benefits of that sort of wide diversification. Now, you could argue that's not something that you manage. Well, yes and no at the specific time where the hit comes but, obviously, historically, we have very deliberately tried to have a very broad footprint in private equity. And part of the reason is basically to have this benefit of geographical diversification.
• 14:37
  Maria Tan Pedersen: Thank you for that. And Markus, what issues facing the private equity asset class, such as portfolio company costs or leverage, do you see as the most challenging and what tactics have you seen GPs successfully employ to mitigate these challenges?
• 14:55
  Markus Bolsinger: Thank you, Maria. I'm super excited to be here with you all. The pressure points that I see as the most challenging are the following two: One, persistent margin pressure from higher material, energy and waste cost, and higher-for-longer rates and tighter lending terms that are limiting leverage and refinancing options. If GPs cannot, as Daniel alluded, totally transform a portfolio company, the tactics I see GPs employ for higher cost
• 15:31
  challenges come in four buckets: three tackling operating improvements, and one dear to my heart. First, they focus on expenses and cost stabilization- for example, centralizing and professionalizing procurement functions. They emphasize digitization and drive automation and diversify their supply chain. Second, cash flow and working capital improvements, for example, extended payment terms to suppliers, factoring arrangements, credit card programs and similar activities, and revenue cycle management - the flipside to the extended terms of their payables. They have a disciplined approach to billing receivables and collections and revenue cycle management is something that Dan will tell us as a freestanding investment thesis in the healthcare space a little bit later. Third, top-line growth, or at least fight to stop top-line erosion. They're doing that by being disciplined on pricing their services or products and addressing customer concentration and then dependency that goes along with it. And fourth, and the one you will understand why is dear to my heart, strategic M&A, both in add-on acquisitions for scale and synergies and carve-outs in selling of non-core assets.
• 17:11
  Maria Tan Pedersen: Lots of good advice there. So where are people investing? Let's talk about sector preferences. Sector specialization is a way for GPs to differentiate their proposition to LPs, and the survey found that GPs are honing in on certain priority sectors.
• 17:27
  Maria Tan Pedersen: Life sciences, healthcare and technology are each expected to be invested in by approximately three-quarters of survey respondents over the next 24 months, which is no surprise given the underlying demand and growth in these industries. The financial services sector is another area that was on respondents' radar. So Dan, Ridgemont benefits from deep sector specialization, which lends itself to effective value creation, specifically in the healthcare industry. Which pockets of healthcare do you focus on, and what are trends that you and your team are focused on looking ahead to 2026?
• 18:12
  Dan Harknett: Yeah, great. Thank you. We've been investing in healthcare for more than three decades, and that gives us a long view of how this industry is involved across multiple cycles. As with each of our sectors, we have a thematic approach. And as you all know, healthcare continues to grow as a share of the broader U.S.
• 18:28
  Dan Harknett: economy, with spending outpacing GDP given the aging population, rising chronic and behavioral health conditions and increasing consumerization supported by all the technology and data trends we see. Because of this complexity and scale, we believe success in healthcare requires a very focused, targeted investment model, and as a result, we focus on several core subsectors where we believe there are long-term, durable tailwinds. A few of those include outsource services and distribution. I would sort of think of these as businesses that reflect employers' and providers' need to control costs and streamline their operations in an ever-increasing, complicated healthcare ecosystem. At-home care is another area where we spend a lot of time. This is growing very quickly, which is supported by a shift towards the lowest-cost site of care as insurers try to steer healthcare towards the lowest cost setting, and it's where patients really want to be. That patient preference is driving care into the home. And finally, pharmacy and pharma services is another area we spend time. We believe there's attractive opportunities for services companies in this category to help distribute products and navigate a very complicated and expensive drug development process. And across all of these themes and subsectors, we're focused on identifying high-quality management teams with scalable business models, and we also deploy a long-term sourcing strategy on. Oftentimes, that results in us having familiarity with these businesses multiple years ahead of them becoming actionable, and this gives us time to diligence companies at a very detailed level and bring to bear differentiated angles in the complicated U.S. buyout market we've been talking about today.
• 20:19
  Maria Tan Pedersen: Thank you, Dan. And on the other side of the world, Sujoy, at Everstone, healthcare and pharmaceuticals, tech services and financial services are among the firm's top priority sectors. Looking ahead to 2026, what are the investments themes that Everstone sees as most attractive in these sectors?
• 20:39
  Sujoy Bose: I mean, we are going to continue to invest into those sectors that we know very well and where, again, India actually has a really strategic place, both from a demand and supply aspect, right? So, if you look at healthcare, for example, there's a massive demand for healthcare services, hospital services in India, right? I mean, it's a growing population.
• 21:02
  Sujoy Bose: It's still young, but it's going to start aging. It's getting wealthier, and the cities are overbuilt, so it's actually very difficult to put new build into the ground. So, there's an opportunity to buy existing sort of mid-tier hospitals and actually make them into really good hospitals. So, there's a domestic market. Fifty percent of U.S. generics are manufactured in India. So, there's a massive play in generic manufacturing. And finally, we are actually pretty good at buying companies in the U.S. and using our sort of India base to grow them cost effectively. So, we recently exited one of the largest U.S.
• 21:44
  Sujoy Bose: revenue cycle managers for hospitals in the U.S. We bought it at about US$400 million we exited it about US$2 billion to a large pension fund. And a lot of the growth actually took place in India because of obvious reasons, right? So, healthcare, we'll continue to look at with both those hats, which is an India demand hat, as well as buying companies in the U.S. and Southeast Asia and so on. In various aspects. IT services has also been a great strength, and we've got some great examples of good investments and good exits in Everstone. We are tweaking it a bit given the AI sort of angle now. We recently invested in a SaaS company which also has a sort of a net marketing kind of an angle, and it was a deal that, actually, we got some really good demand on co-invest.
• 22:39
  Sujoy Bose: So, we actually ended up getting more co-invest than we invested ourselves, which was great. But I also wanted to mention that there's a new area that we are looking at, which is industrials. And we see a great opportunity in India, because India has made a decision from the very top that we want to improve our manufacturing prowess.
• 23:03
  Maria Tan Pedersen: Thank you, that's fascinating. Now turning to fund trends. As mentioned earlier, the current fundraising environment has been challenging, with fundraising activity levels during the first three quarters of 2025 on pace for a roughly 25% decline versus last year, according to EY. As highlighted in the survey, a diversified platform that offers investment opportunities across asset classes can help GPs raise capital. The survey also indicated optimism around the potential of opening up private equity to retail investors, especially in Asia. Sujoy, I'm going to turn to you again.
• 23:44
  Sujoy Bose: Five years ago, if I was an Indian fund manager, I had to put on a suit and tie and go to London and New York and Abu Dhabi and Singapore, right?
• 23:51
  Sujoy Bose: Interesting thing is, this is now changing. There's a restriction in India of locals being able to repatriate their capital outside. So, there are capital control laws in the country where, you know, you basically make your money in India, you have to spend it and invest it in India, mostly. You can basically export US$250,000 a year. That's it. Since COVID, as you all know, there has been significant wealth creation among founders of IT companies, even the large industrial companies have actually come up with very successful IPO spinoffs, etc. So, there's been a massive amount of capital that has accumulated in the country.
• 24:36
  Sujoy Bose: There's also a lot of money going into the institutional fund management sectors, which is basically the pension funds and the insurance companies. The pension funds and the insurance companies in India currently have about a trillion dollars with them, which is not that well known in the rest of the world. The big change in India has been that today, several of us who are local fund managers, we are looking at raising capital locally. This has become, actually, a great way to scale. And some of these checks have started to be sizable. So you can raise, frankly, US$800 million, a billion dollars in India in a fund.
• 25:15
  Sujoy Bose: The investors look for certain aspects, for example, yield. So, it's still not pure private equity. They will invest in private equity, so, that there's a couple of funds that have actually been very successful in raising private equity money in India. There's a more sophisticated level, you know, a sort of set of players who run family offices. But also, there's a set of players who are really distribution companies who can raise a lot of money, hundreds of millions of dollars, from a very large pool of retail investors at, say, US$100,000 a pop. Because think of the scale of India, right? I mean, there's a lot of people who are able to invest US$100,000 and if you bring that together, you can actually raise a few hundred million. So there's almost like a barbell strategy, where you have these family offices that can write a check for US$100 million and there's this distribution platforms which can actually raise significant amounts of capital with very small tickets. The regulatory system permits both these types of fundraising for the investment vehicles, the funds in India, which are governed by the Securities and Exchanges Board. So, this is the big transition that fund managers in India are going through. And it's a happy transition because, of course, there's a lot of foreign capital still interested in investing in India. But on top of that, now the domestic capital has found this new asset class. So, you have to, of course, have a good track record, a good governance approach. You have to be well established in the system. But if you check all those boxes, it is starting to happen at scale in India.
• 27:00
  Maria Tan Pedersen: Thank you, Sujoy. And Daniel, Investcorp's platform spans private equity, real assets, credit management, absolute return investments and strategic capital. What are the fundraising trends that you see across each of Investcorp's business lines? At Investcorp, what are the strategies, for instance, separately managed accounts that the firm has had success with from a fundraising perspective?
• 27:27
  Daniel Lopez-Cruz: Let me go asset class by asset class, because it's somewhat different, Maria. So, let's start with private equity, which is where we have the biggest footprint.
• 27:35
  Daniel Lopez-Cruz: Private equity in the developed market, so U.S. and Western Europe, the blind pool fund still dominates the fundraising.
• 27:45
  Daniel Lopez-Cruz: So, most of our funds are being raised, basically, through blind pool funds. We are seeing the same complications as everybody else. I mean, funds are taking longer to be raised, but in the end, we appear to be successful in getting to the target fundraise levels that we announced at the beginning. And over the last two years, with being quite active, also, with continuation vehicles, with single-name continuation vehicles. So, we've done three of those in Europe over the last 18 months. We have another big one coming, probably, in the first quarter of next year for a healthcare technology business that we have in the Nordic countries. And we're constantly looking at other options. Now, the private equity emerging market scene is richer in terms of the things that we have been able to do there. We have blind pool funds.
• 28:35
  Daniel Lopez-Cruz: So, we have recently closed our private equity India fund this last summer. Fully agree with Sujoy. We were surprised by the amount of capital that we were able to raise in India, both institutional capital and also some ultra-high-net-worth individuals or high-net-worth individuals, much more than we expected initially. We have also, recently, as of the end of June, finalized raising a US$750 million fund, which is a bilateral fund with some sovereign wealth institutions in China for investments in the Gulf, which is a very interesting sort of instrument, where, basically, you have two vehicles, and investors can come into either the vehicle that will be investing in the Gulf or the vehicle that will be investing in China, or basically both. The fund is called Golden Horizon, and we have just basically finalized raising this. Incidentally, we're seeing- which I think is relevant for the fundraising discussion - significant capital from China being redirected away from the U.S. into Southeast Asia, Gulf and Europe.
• 29:48
  Daniel Lopez-Cruz: I don't think the sovereign wealth institutions in China are providing new commitments, as we speak, to North American private equity funds. They are reacting to a number of select funds and the direction of travel. As long as the current state of confrontation with the U.S.
• 30:05
  Daniel Lopez-Cruz: persists, the direction of travel will be, basically, to redirect that capital away from the U.S. into other parts of the world. And it is very relevant, because historically, the U.S.
• 30:15
  Daniel Lopez-Cruz: was roughly 60% of the allocation that these players in China were making to private equity funds outside of China.
• 30:26
  Daniel Lopez-Cruz: Then you were talking about SMAs. We've been successful with SMAs in Southeast Asia. There, we found also some sovereign wealth institutions that really wanted something very, very targeted, typically by country.
• 30:37
  Daniel Lopez-Cruz: So, they don't even want to be investing on, broadly, on Southeast Asia, where we have a team in Singapore. They wanted to be invested in the specific country where that sovereign fund is placed,with a small basket to do something in the rest of Southeast Asia, or even in Europe. And so, that's an avenue to raise funds in that part of the world, based off our own experience. Now, we move into our other three big alternative asset classes. In credit, our business is mostly a CLO business. Obviously, there you raise funds through raising CLOs. We're seeing a pretty good market. We're going to have a record year in 2025 in Europe in terms of the amount of CLOs raised and also a pretty good year in the U.S. We raise capital, also, through business development companies and credit, I think, is in the epicenter of the evergreen fund discussion. Because, as you know, Maria, the challenge with the evergreen funds is that investors on those funds, which will be largely retail investors, they want some liquidity, and that's not something that private equity can provide easily. But it's very easy with credit, because credit, obviously you're investing in senior loans, and those senior loans will pay interest and will pay scheduled amortizations and principal according to the terms of those loans. So there is a constant flow of money that can provide some liquidity. So, we're very actively looking right now at an evergreen fund for our credit strategies, but it still basically is in the making. In real estate, our business raises capital both deal by deal in the Gulf, but also, increasingly, through dedicated funds. These funds will be thematic, will be around student housing, or will be around retirement housing, some themes around which, basically, we can build a fund vehicle. And lastly, in infrastructure, we're currently raising a US$750 million fund.
• 32:43
  Daniel Lopez-Cruz: So, that will be also a blind pool sort of fun vehicle. But I think what I would say, which I said at the beginning, is it is true what we are reading. It is a tough market out there. It takes longer. You just have to go hard at it and, basically, have your teams very motivated to keep on knocking on the door and, you know, having very prolonged discussions with LPs.
• 33:07
  Daniel Lopez-Cruz: But our experience, at least, is that in the end, you get to your destination, and that has been our experience, pretty much in all of the fundraisers that we have done over the last two years.
• 33:18
  Maria Tan Pedersen: Thank you, Daniel, and thank you for that trip around the world on the fundraising discussion. Dan, co-investment is another trend that is being used to lock in LP support. How has Ridgemont adapted to the increased prevalence of co-investment in private equity? What are the positives and the risks that both LPs and GPs are learning?
• 33:43
  Dan Harknett: Co-investment has become a critical part of today's private equity landscape, and the majority of our LPs are looking for access to those opportunities. For Ridgemont, this co-investment program allows us to deepen our alignment with the largest LPs and most important LPs, in addition to giving us flexibility in how we capitalize those businesses, especially in situations that require larger equity checks. We've always taken a very selective and strategic approach to co-investment opportunities. At times, that means partnering with our more strategic LPs, who can move quickly and participate at scale. At other times, it means teaming up with our investors that bring complementary prior investment experience, or those which have specific pockets of capital, like junior capital, which can help us better recapitalize and position the businesses for the next phase of growth. From a positive perspective, there's a lot of demand for this type of product, given LPs are able to lock in high conviction opportunities with a very attractive fee structures, which is, as you mentioned, very important for many of our investors. GPs, in turn, are able to pursue larger, more complex transactions without over-concentrating the funds while simultaneously strengthening those long term relationships with LP partners.
• 35:04
  Dan Harknett: So that's great, and can be very powerful. That said, the market here is still evolving pretty real time. For LPs, the challenge in developing conviction quickly on opportunities and managing their internal process flows to gain access to them on very tight timelines and maintaining discipline in an increasingly competitive co-investment environment are definitely top of mind. And for GPs managing that co-investor coordination, who do you start with? How broad is the outreach? At what time?
• 35:35
  Dan Harknett: The reporting and governance required to support these programs requires real infrastructure, and it's important to also balance transaction size with a firm sweet spot that still leaves the appropriate hold size for both the fund and its LP investors.
• 35:53
  Maria Tan Pedersen: Thanks Dan, a dose of reality there. Sabina, GP-stake divestitures are on the rise, with more than three-quarters of survey participants indicating they plan to make a GP-stake divestiture in the next 24 months, double the proportion that had these plans a year ago.
• 36:14
  Maria Tan Pedersen: What do you see as the risks and benefits of these transactions?
• 36:19
  Sabina Comis: On the GP stakes, I think the statistic says it all. It is amazing to see how many more sponsors are looking at GP stakes. The main benefit is obvious: It is an additional tool in the liquidity toolbox.
• 36:34
  Sabina Comis: However, it is often more than just that and can specifically serve for talent retention, or for adding a strategy and hiring a new team altogether. We know that GPs are trying to build larger platforms, as Daniel explained. GP stakes also allow to fund generational changes. In addition, they allow to respond to a growing need for larger GP commits. LPs want more skin in the game from the GPs, and that means larger GP commits, so you need to fund that. That larger GP commit is also a strategic move to help commit the investor to subscribing to the next generation of funds. In short, it's a commingled number of factors of value creation and strategic partnerships. You also asked what the risks are? I do think there are a few but they are all manageable.
• 37:30
  Sabina Comis: Over-concentration of GPs can be seen as one of them. It may also result in a number of conflicts of interest issues. Now, I believe that's manageable.
• 37:50
  Sabina Comis: There's also when you have a new GP or GP staker coming into a GP, we talked earlier about alignment of interests and skin in the game. To some extent, it's a third party that's coming into what used to be an entrepreneurial venture of a number of managers coming together, having a given and well defined investment strategy- the old world as we knew it as private equity. So, we're changing the paradigm here slightly, and that's a risk, again, I think completely manageable. The statistic shows though that, for the time being, 59% or 60% of the respondents said when they're looking at a GP stake, they're looking at a minority GP stake. So, they're not yet ready to hand over the“keys to their shop”, they're just letting go of a small stake so that they can generate some working capital and potentially at times a strategic partnership. Let's see how that evolves. I'm not entirely sure that this will remain the norm in a few years.
• 38:46
  Maria Tan Pedersen: And you started out your comments with the term liquidity, and liquidity is a major theme in this year's report. So, turning to the liquidity cycle, higher interest rates and market dislocation have made it difficult to exit companies, and these same forces have also slowed capital deployment. How have you seen GPs address the potential liquidity cycle concerns of their LPs? What should GPs consider when looking outside of a traditional M&A transaction or IPO to address the need for liquidity?
• 39:21
  Sabina Comis: GPs have been really aggressive on this and very active. They've been out there developing and accepting different types of liquidity tools. We talked about continuation vehicles; we talked about GP stakes and GP-led secondaries. We didn't mention this yet, but they are also a big part of the market right now: I am referring to the NAV and subscription lines. All these tools feed on each other.
• 39:46
  Sabina Comis: Some of them are more controversial than others, but ultimately, depending on where they are in terms of the life cycle of the fund, one or the other tool may become more useful. The important thing to keep in mind that even if liquidity issues were to decrease, in an industry such as ours, those tools are here to stay now. I don't think they will disappear. I think they've become, again, part of the game.
• 40:12
  Sabina Comis: Eventually, it all comes down to fair value. It's all about the valuation and the conflicts of interest. So, as long as the fair value and the conflicts of interest are under control, I think those tools will help the industry continue to grow.
• 40:28
  Maria Tan Pedersen: Daniel, what innovative structures are you seeing emerge as an alternative liquidity source for your investors, given your lead teams across Europe, North America, India, Asia and the MENA region?
• 40:39
  Maria Tan Pedersen: How do you see these trends differ by region?
• 40:46
  Daniel Lopez-Cruz: Perhaps before we go into more innovative structure, let's also remind ourselves of traditional liquidity avenues, because, again, it's not all gloom.
• 40:56
  Daniel Lopez-Cruz: Earlier this week, we have IPOd one of our portfolio companies in India by the name of NephroPlus, which is the largest provider of dialysis services in India, with, you know, over 500 centers, up from less than 200 what we invested initially. And the reception has been incredible. And in China, perhaps unbeknownst to many, even though the Shanghai and the Hong Kong Stock Exchanges have been closed for years, they reopened in the first quarter of this year, and we are seeing tremendous activity. And everything that is being floated is just laughable. The books are like, you know, 100 times, 1000 times oversubscribed. There is a glut, obviously, of companies going to that channel. You have a double approval process in China, because it's not only the equivalent of the SEC, but also there is a final approval at the level of the government. And you may have other considerations that will come into play.
• 41:56
  Daniel Lopez-Cruz: So there is a long list, basically, to be approved, to go, but certainly people that are ready to hit the window in these months, in which we are, they're finding an incredibly strong market. So the IPO market is there, certainly in emerging markets. It is also there in developed markets, but it's been less robust that has been in the past, and much more selective.
• 42:18
  Daniel Lopez-Cruz: Now, continuation vehicles, I don't think we should continue to call this an innovation.
• 42:21
  Daniel Lopez-Cruz: They've been around for some time. The first one that we did was in North America in early 2022, that was a three-asset continuation vehicle. I agree with Sabina. I think this instrument is here to stay. It is linked to the tremendous strength of the fundraising by secondary funds, which, as you may know, are raising incredible amounts of money. 2025, will be a record year in terms of secondary fund raising by value.
• 42:49
  Daniel Lopez-Cruz: And that market in secondaries, as you know, is roughly 50% LP led, 50% GP led. And of the 50% that is GP led, 80% is continuation vehicles, mostly single-asset continuation vehicles. So, I think they're here to stay. Hopefully, the industry does not face a number of disappointments there, in which case, perhaps that avenue will remain a bit constrained.
• 43:14
  Daniel Lopez-Cruz: But certainly, the cases that we are exploring right now, we are seeing very significant interest. I would say we are not seeing yet the emerging markets ready for single-name continuation vehicles. There may be exceptions. I'm not saying that that none has been achieved, but certainly in the Gulf and in India, we have explored it, and we're not seeing the secondary players yet at a scale or with a predisposition to go into emerging markets in a major way.
• 43:46
  Daniel Lopez-Cruz: I'm sure that will be coming. In probably one, two years, we're going to start seeing in greater numbers, continuation vehicles, single-name continuation vehicles in the Gulf and in other emerging markets. But that's not something that we are seeing as of now.
• 44:02
  Maria Tan Pedersen: Sujoy, what are the trends you see regarding the liquidity cycle in APAC, particularly in India?
• 44:09
  Sujoy Bose: Yeah, look, I don't want to come across sounding too optimistic about everything, right? But I just want to continue a little bit on what Daniel said. First, let me start with Everstone's experience in private equity. So, over the last five years, we've invested about one and a half billion dollars total, and we have returned over three and a half billion dollars. So, fundamentally, and I believe this is the case not just in India, but in all emerging markets, which is that in these markets, there is a lot of capital chasing very few opportunities, good opportunities. And my belief is that, and our belief is that, if we create good companies, those companies demonstrate growth, we have bought them at the right price, so that we are not having to overly hype the price at exit, they will always find a good home, whether in the IPO market, whether strategic sponsors are buying them. And the interesting thing in India is that until about, I would say COVID, liquidity was a massive issue. Exits were a massive issue in the PE market. This has completely changed over the last three, four years, and now what you have is a lot of the large direct investors who are investing into India - pension funds, some of the sovereigns.
• 45:34
  Sujoy Bose: So in my previous role in NIF, we had invested in one of the largest hospital chains in India, which was bought out by a Singaporean sovereign, right?
• 45:43
  Sujoy Bose: And it was a large transaction.
• 45:46
  Sujoy Bose: And basically we exited the entire amount. It was a large amount. So, in fact, last year, there were two exits that were a billion dollars, four exits over half a billion dollars. So, this was unheard of in India, and it was probably something that was not also that usual in emerging markets until a few years ago.
• 46:07
  Sujoy Bose: But now, that has changed. Add to that is what's happening in the sort of the listed markets, not just in IPOs, but in secondaries in India. So today, the stock market, I think, market cap is around 120% of GDP. So let's say around US$4 trillion, about US$30-US$35 billion of new individual - so these are individuals investing through what's called investment plans, right? Where they contribute money every month.
• 46:40
  Sujoy Bose: That's about US$30,-US$35 billion. On top of that, I already mentioned, you have the pension funds, the insurance companies, that are sitting on tons of capital, and they are growing. So, the largest Indian pension fund is growing at something like 17% a year, and they're already, I think, about US$300 billion. So, these are significant numbers, and all these numbers are coming to the stock market. And guess what?
• 47:05
  Sujoy Bose: There are only so many companies that are worth buying on that stock market. I mean, as Daniel mentioned, you have a good company with good governance, with good management, demonstrating growth. It is a, you know, frenzy, right? I mean, because there are not that many companies for people to buy. In fact, PE-to-PE sales in India is not that much in terms of all the exits. It's really listed markets. And as I mentioned earlier, 60% of exits last year were through listed markets.
• 47:36
  Sujoy Bose: It's strategics buying, you know, companies that fit into their portfolio as they're expanding their business in the country. It's direct investors, like pension funds, sovereign funds, etc., that want to come into India and they want to write US$400-US$500 million checks, right? And of course, then there is the PE industry that that are buying from each other. So, it's not been a problem. Again, the numbers for the PE sector as a whole - and it's all PEs going into the country, this does not include VC - is about US$40 billion was invested last year, and US$33 billion was exited. So, these numbers are actually pretty healthy, and that is why, you know, we are seeing a lot of interest of capital coming into the Indian market.
• 48:23
  Maria Tan Pedersen: Thank you for that, Sujoy and Daniel, because that's really a very fascinating insight that brings color to what we've seen in the survey, and also, I think, underlies kind of the unevenness of the picture across regions.
• 48:37
  Maria Tan Pedersen: Dan, how has Ridgemont been successful in generating meaningful distributions for its partners, even through challenging market dynamics. How does Ridgemont think about the liquidity cycle?
• 48:50
  Dan Harknett: Yeah, you know, I go back to the alignment point I mentioned earlier and some of the comments that Sabina made around GP investments.
• 48:56
  Dan Harknett: Collectively, our GP has been one of the largest investors in each of our funds. On a percentage basis, that level is multiples above the average GP commitment in the buyout space.
• 49:08
  Dan Harknett: And that really influences, you know, how we think about deployment pacing and also returning capital. We target a roughly four-year deployment cycle, and that has truly been about 25% of our flagship fund per year is invested, which we've been doing now for multiple funds, and that's enabled us to maintain balance between putting capital to work and returning capital to our investors. So in markets like today, the GP is very much aligned with our limited partners when it comes to generating meaningful distributions. And given that dynamic historically, the DPI, in most cases when we approach fundraising, is around one times. We understand firsthand the importance of liquidity, particularly in the current private equity environment, where exits have been a little bit more constrained. In general, we're less trying to time the market for these transactions on both the buy and the exit, and more utilizing a measured pacing strategy that supports steady liquidity across vintages, which has worked very well for us, particularly in this market. And specific to Ridgemont, 2025 marked a record year for distributions for us - an all time record - which was actually closely followed by 2024 and 2023. So, even in a more complex environment, we've been able to deliver some strong realizations through thoughtful timing, strategic sales, recapitalizations, and, really, that level deployment and exit timing that we've been focused on.
• 50:44
  Maria Tan Pedersen: So, no discussion of liquidity is complete without covering private credit. We are long past the days when a GP will raise a single syndicated loan for an acquisition and that will be the full extent of the financing.
• 51:00
  Maria Tan Pedersen: The wide range of different private debt products that GPs are using highlights how the private credit playbook has expanded beyond the industry's core direct lending foundations, and this year's survey shows that private credit is being used at the portfolio level, the fund level and the GP level, and spans acquisition financing, refinancing, recaps, NAV facilities, subscription lines, etc. Nick, how have GPs been able to take advantage of a broadened private credit toolkit and optimize their capital structures? What are the cutting-edge uses of private credit, such as bespoke facilities, that address specific requirements that you have seen GPs successfully deploy?
• 51:49
  Nick Tomlinson: Thanks, Maria, you're absolutely right. You can't talk about liquidity today without talking about private credit. Our Outlook report shows that private credit has evolved from primarily plugging gaps left by banks retrenching. It's now matured into a much more of a one-stop capital solution, and at scale. The Alternative Credit Council reports over US$3 trillion of private credit AUM, and the big platforms now offer
• 52:14
  the full menu: senior, unitranche, junior, Holdco PIK, asset-backed and recurring revenue lines, as well as NAV and GP-led facilities. So, one relationship can support the portfolio company, the fund and the GP. And the numbers from our Outlook report are interesting.
• 52:29
  the full menu: Fifty-seven percent of the respondents picked private credit as a key focus, and over half are already using it for portfolio-level refinancings and recaps - the single most common use case - and 36% expect the use of fund finance to increase from just 2% last year, and over half have a co-investment program alongside that. So, how are GPs using this broad toolkit? Well, first, to address GP liquidity needs in a bespoke and flexible way. Liquidity is described in our report, as we've covered elsewhere, as the single biggest issue facing private equity. If you can't deliver DPI, it's often seen as difficult in the context of raising additional funds, and so private credit is now seen as part of the solution. Whether on the one hand, portfolio-level refinancing and recaps to allow time for a second phase of growth with portfolio companies.
• 53:20
  the full menu: Or, on the other hand, NAV and hybrid lines to fund follow-ons and smooth distributions. Plus, we're seeing GP-level lines to support larger GP commitments and seed new strategies.
• 53:33
  the full menu: The second point to note is that the pricing and competitive backdrop has shifted maybe slightly in the borrower's favor in the last year or two. The report points to interest rate cuts in Europe and the U.S., combined with active syndicated loan and private debt markets, and there's also been very strong private credit fundraising. So, there's some pressure to deploy over US$1 trillion of dry powder in that context. So when that's all taken together, this has meant rates and other terms changing slightly. And third, the relationship aspect is deepening between GPs and the private credit providers, meaning these longer-term GP private credit partnerships where lenders can help design capital structures at portfolio, fund and GP levels, so more flexible relationship capital as opposed to more of a case-by-case, commoditized debt product. So wrapping this up and bringing it together, what's really got going as a maybe as a void filler for banks, retrenching has become a sophisticated, one-stop, relationship-driven private credit toolkit, and GPs using it at its best are those treating it as a strategic way to engineer liquidity and optimize capital structures across the whole platform, not just at a single portfolio company level.
• 54:51
  Maria Tan Pedersen: Before we wrap up, I'd like to ask each of you to provide a 30-second outlook on 2026 based on your roles in the global private equity market. We'll start with Sujoy.
• 55:03
  Sujoy Bose: Maria, first of all, many thanks. It's been really interesting, and thanks to all the panelists. I've actually learned a lot about many different things that that I heard today. Look, I wanted to close by reminding all of us that three of the largest global economies reside in Asia, and this is not going to change.
• 55:22
  Sujoy Bose: Despite temporary things that happen, it's not going to change. And these economies are going to get stronger. Companies are going to be born, companies are going to grow. Companies are going to need the right kind of care and the right kind of backing, support of capital. And I remain super optimistic that private equity is going to play a key role. You know, I feel that in these countries, intermediation of capital is still at very early stages. So, not only are these economies large, they are growing. But the intermediation aspects are at the early stages. So, I am very optimistic that for our industry, Asia is going to be the future. I feel India is going through a structural shift. And I'm actually really, really privileged and lucky to be focused on India, and I hope that what we've seen in India over the last decade continues for the next decade, two, three, four decades. The world is in a very different place, if that happens and it's positive for everybody.
• 56:27
  Maria Tan Pedersen: Thank you.
• 56:27
  Maria Tan Pedersen: Dan?
• 56:29
  Dan Harknett: Here in the U.S.
• 56:29
  Dan Harknett: buyout market, you know, as we look toward 2026, we do expect to see an increase in transaction levels, but it remains very challenging and competitive. You know, I think those that remain disciplined and deploying and returning capital should continue to perform well and differentiate themselves, but we're operating in an environment where true A-quality assets command meaningful premiums, and liquidity is increasingly scarce. So, there's really a premium on creative deal sourcing, structuring transactions and how to keep exposure to the best assets in your portfolio for longer, while balancing that need to return capital. In that context for Ridgemont, our focus is to remain consistent and stay grounded in our thematic investing roots, maintain that deployment cycle I talked about in portfolio construction and continue partnering with great management teams to build long term value.
• 57:30
  Maria Tan Pedersen: Daniel, may we hear from you?
• 57:33
  Daniel Lopez-Cruz: Yeah, I would probably, Maria, I would probably go with both an outlook but also a hope. So, I hope that 2026 is what we thought 2025 would be. When we started this year, as you may recall, we had a very strong first quarter in private equity, only to be derailed by events in the second quarter, most notably the announcement of the Liberation Day tariffs, which created a fair amount of uncertainty that created a very slow second quarter. And every piece of data that we have is that the third quarter has been better, and the fourth quarter is doing OK. So, in the end, we had a bit of a disruption. So, my hope and my outlook is that 2026 is going to be what we thought 2025 would be- a year of consistent normalization of many of these trends that we have been discussing. Now, we need one thing for that, but I think it's more likely than not. I think we need the current U.S.
• 58:33
  Daniel Lopez-Cruz: administration to really focus on market stability and reducing uncertainty, and given that we have midterm elections in November of next year, I think it's more likely than not that the U.S. administration will get very focused on that. And I think if we can reduce that source of uncertainty in a major way, I don't see a reason why we should not have a better 2026 and that will mean that the markets will be open to new deals, will be open to do exits, the continuation vehicles will continue, the IPO markets will continue, fundraising will continue - it will continue to be painful and slow, but possible. And as I said at the beginning, triple of AUM in 10 years, with the same value of exits. It's going to take some time for this to come to equilibrium, but hopefully, 2026 will be a big year in closing that gap.
• 59:30
  Maria Tan Pedersen: Hear, hear, Daniel! Sabina?
• 59:34
  Sabina Comis: I have the exact same wish as Daniel. Let's have 2026 as we would have hoped 2025 would have been. In an industry that is facing challenges. It's also shown how resilient it is.
• 59:47
  Sabina Comis: I think there's premium on quality. Dan and the other speakers have said that. And all I can say, and I would like to end on this, is that we, Dechert, as facilitators, are certainly equipped and ready to continue working hand in hand with our clients and to operate in this resilient and dynamic industry.
• 1:00:06
  Maria Tan Pedersen: And I'd like to just add a really heartfelt thanks to all of our panelists today and echo everyone's wish and hope for the 2026 that we all need in this industry. Take care.
• 1:00:24
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• 1:00:27
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