Overview
After an unexciting start to the year, financial markets reacted in a decisively risk-off fashion as tensions in the Middle East escalated to direct military action and the effective closure of the Strait of Hormuz.
Prior to the military escalation in late February, financial markets were already showing signs of softening, with equities drifting lower, bond yields edging higher and oil prices gradually rising, reflecting a more cautious macroeconomic and geopolitical backdrop. Immediately following the attacks on Iran by the US and Israel, oil prices jumped swiftly and equities sold off, particularly in Europe and the US, while gold rose and the US dollar strengthened as investors shifted expectations for inflation and interest rate policy.
Private markets have remained reasonably resilient to the volatility – so far. Data shows that deal activity and exits have continued, albeit at a relatively softer pace than previously – and with a continued focus on selectivity and disciplined deployment. Early signs are that fundraising is proving more challenging so far this year, although on a more positive note, funds that have been successful at raising capital are taking slightly less time to reach a final close – 14 months in Q1 compared with 19 months in 2025, with over 80% of funds that have closed either meeting or surpassing their targets1.
As regular readers would expect, we have maintained our rigorous approach to investment and exits. We are cautious investors by nature but are encouraged both by industry reports that highlight small- and mid-market buyouts as a key focus for private equity investors in 20262, and our own experiences and conversations. We have found demand for our strategies in the market has remained strong, such as for our Emerging Managers strategy, while our investment teams continue to find both attractive investments and exit opportunities. Our Directs team is, for example, finding increasingly interesting opportunities in the growing market for mid-life transactions, which is discussed later in this letter.
Deals and exits
Global deal activity fell during Q1 2026, with 1,998 deals globally over the period compared to 2,140 deals recorded in Q1 20253. Alongside the decline in the number of deals, deal value also fell – with USD 191.0bn in Q1 2026, some 20% lower than the USD 239.1bn achieved in Q1 2025. North America experienced a rise in the number of deals but a drop in the value during the period. Some 1,155 deals were recorded in Q1 2026, with the aggregate deal value totalling USD 99.3bn, compared with 1,346 deals in Q1 2025.
In Europe, the number of deals dropped from 785 in Q1 2025 to 523 in Q1 2026. However, aggregate deal value rose from USD 44.5bn to USD 70.8bn.
In Asia Pacific the aggregate number of deals dropped slightly from 365 to 324 between Q1 2025 and Q1 2026. The aggregate deal value also fell – down from USD 53.0bn to USD 34.0bn – a 36% decrease.
Exit activity remained subdued globally during the period with 457 deals undertaken in aggregate, down from 559 in Q1 2025. Aggregate deal value also declined from USD 112.7bn to USD 88.7bn over the period – a 21% decrease. Trade sales continue to be the more favourable exit route during the quarter, followed by secondary buyouts. Nine IPOs were undertaken during this period.
Figure 1: Global Exits Aggregate Deal Value (USD bn)
Source: Preqin
The number of exits in North America fell from 257 in Q1 2025 to 243 in Q1 2026, while aggregated deal value declined from USD 60.0bn to USD 51.1bn. In Europe, 137 exits took place during Q1 2026, down from 206 in Q1 2025. Aggregate deal value also decreased slightly from USD 35.8bn to USD 25.9bn. Over the same period, Asia Pacific saw exits increase, with 77 exits taking place in Q1 2026 compared with 96 in Q1 2025. Aggregate deal value dropped from USD 16.9bn in Q1 2025 to USD 11.6bn in Q1 2026.
1PEI Fundraising Report Q1 2026
2Preqin Investor Outlook: H1 2026
3Preqin, April 2026
Setting a strong pace for 2026
Our investment and exit activity continued its lively pace at the start of the year. In February, we acquired stakes in two funds, LEA II and LEA III, for our secondary programmes. LEA Partners is a German B2B-Software specialist, consolidating vertical software providers: we were an early backer of the team via our Emerging Manager programme and we have continued to build a broad investment relationship with them. The firm has a superb track record with Fund I ranked in the top decile. Fund II is expected to achieve de-risking within the next 24 months, with full liquidation taking place in the next three to four years.
In January we completed the sale of our stake in Polaris IV, as part of our active portfolio management strategy. Polaris is a leading Nordic mid-market investment firm headquartered in Denmark and its IV fund made 12 investments – six have been fully realised with the remaining six still in the portfolio. An offer on the secondary market was accepted and enabled us to crystallise attractive returns for our investors.
In March we also agreed to sell our stake in FORM alongside Diversis Capital. FORM is a SaaS mobile data collection platform used in sectors like banking, energy and food. It helps medium to large firms improve the collection, management and leverage of the data they collect. FORM was sold to Trax Retail, a portfolio company of Gemspring Capital, generating an attractive gross return.
Further information on our transactions in Q4 2026 can be found at the end of this document.
Our Emerging Manager Conference goes on tour to London
Emerging managers are becoming increasingly attractive to private equity investors. Their unique ability to outperform more established counterparts on a risk-adjusted basis makes them an excellent option for LPs looking for alpha, innovation and good returns. This advantage was clearly on show at our recent ‘Emerging Manager Conference on Tour’ event in London.
This was the first time we had brought our increasingly-popular event to London and the rapid take-up of available places highlights the sector’s strong appeal. More than 80 guests attended the conference at the Royal Society of Chemistry as we showcased cutting-edge research on the sector and engaged in thought-proving conversations from across the emerging manager ecosystem.
During the event we were delighted to be joined by Nic Humphries, Senior Partner at Hg Capital, for a fireside chat. He shared with us Hg Capital’s incredible journey to becoming one of the world’s leading technology and services investors.
We then held two intriguing panel discussions hosted by our sponsors. The first panel with Langham Hall, asked the question every emerging manager has to face: how to launch their first fund. The panel looked at why operational setup is a key consideration for emerging managers who want to reach a first close. Participants also unpacked the primary operational challenges and considered the best route to regulation, European marketing best-practice, and the value of onshore vs offshore setups.
In the second panel, moderated by Monument Group, we shifted focus to team chemistry. When it comes to due diligence, the panel argued that team dynamics and founder disputes should be top of mind for LPs considering emerging managers. Through real-life anecdotes, the group highlighted the best practices for navigating difficult situations. They also provided some sage advice to LPs about what issues they should look out for when assessing a new management team: ego issues and conflict resolution tools were top of mind.
We also enjoyed a fascinating presentation from our another of our sponsors, Addleshaw Goddard, updating us all on recent trends around legal and commercial funds terms. The team also provided observations on the regulatory landscape for emerging managers.
Back by popular demand, and for many the highlight of the day, we held two dedicated sessions to showcase great examples of emerging managers making their way in the market today. During these ‘Meet the GPs’ sessions, six up-and-coming GPs answered the same seven questions – no slides, no visuals – and tried to convince LPs in the room that theirs should be the next fund to watch. Hugely informative, these past-paced sessions provide great examples of why we think emerging managers are worthy of more attention.
Thank you to all our sponsors and guest-speakers for another fantastic conference. We will be taking our Emerging Manager Conference on the road again – watch this space!
Mid-life deals come to age
As highlighted earlier, global exit activity remains distinctly subdued and during this prolonged dry spell, our Directs team has seen strong growth in the market for mid-life transactions. These deals have become increasingly popular in recent years as a direct result of the mismatch between the growing stock of portfolio companies amd subdued exit activity, leading to longer holding periods.
Mid-life deals – those which take place during the holding period rather than at entry or final exit – are not new. When fundraising slows down significantly, interest rates rise and exits come to a near stand-still, such transactions can provide an emergency valve of liquidity. They have been recognised for some time as an efficient way for GPs to generate liquidity and inject fresh capital into an already mature asset, without necessitating a full exit into an unforgiving market or a time-consuming continuation vehicle process.
But recent market conditions and the maturation of the private equity industry in general have resulted in them moving from a niche tool to an increasingly core feature of portfolio management.
Over the past three years in particular, we have observed an increase in the quantity and sophistication of mid-life transactions and they are now regarded by GPs and LPs as a strategic tool that, when used appropriately, can help GPs preserve momentum and compound value into an asset they know well, as well as providing optionality for existing and prospective LPs. They give GPs more control over fund growth and more appropriate timing for exits and can also help to re-align investors around a fresh exit timeline. They can also provide existing LPs with a liquidity option at a fair price, as well as attract new investors. In addition, they serve to fund growth strategies that can add value and ultimately improve exit outcomes.
While mid-life deals can occur among portfolio companies of any size, their natural home is in the small and mid-market. There are several reasons why this is the case. For example, continuation vehicles (CVs), while powerful, are resource intensive and costly. Large funds can absorb this burden, but small and mid-market funds cannot. Another reason they work well in the mid-market is because smaller GPs have fewer liquidity tools at their disposal. Mid-life capital can fill this gap with efficiency and flexibility.
The increase in mid-life deals is not a temporary response to liquidity challenges. It is a more fundamental part of an increasingly-mature private equity market. It signals a shift in how private equity can preserve momentum, protect alignment and manage timing. GPs will continue to look for tools that give them more control over fund growth and exits, particularly in inconsistent exit markets and with elevated financing costs. Mid-life transactions are an attractive way of achieving that control. We are seeing a lot of benefits to all parties. LPs get exposure to mature, derisked assets with clearer upside and shorter durations while GPs can continue to support high-conviction companies. And for the companies themselves, these transactions provide capital at a crucial moment. As such, we believe mid-life capital is becoming one of the most exciting growth trends in private equity.
Unigestion Private Equity Activity
Here are the highlights of some of the investments that we completed in Q1:
In January, we commited to Cow Corner III – a Brighton-based fund manager founded in 2018 by the former Head of Business Services at HgCapital and a former Partner at HgCapital. Cow Corner is a sector specialist focusing on mission-critical, non-discretionary B2B companies within high-growth and high-IP subscription-based software and professional services verticals with high M&A potential. The firm adopts a highly operational approach, with direct involvement from the team to unlock growth through professionalisation initiatives and an enhanced focus on revenue quality, while simultaneously driving regional consolidation. Cow Corner employs a highly experienced operational team to drive performance and business excellence throughout the portfolio.
Also in January, as part of our active portfolio management strategy, we completed the sale of a stake in Polaris IV, a 2015 vintage vehicle. The fund has made 12 investments, with six fully realised and six remaining in the portfolio. Given that the fund is in its tenth year and is expected to take another two to three years to complete the exit of the remaining assets, an offer on the secondary market was accepted, crystallising attractive returns for investors. Polaris is a leading Nordic mid-market investment firm with headquarters in Denmark.
In February, we acquired two fund stakes, LEA II and LEA III, for our secondary programmes. LEA Partners is a German B2B-Software specialist, consolidating vertical software providers and has achieved an outstanding track record (Fund I is ranked top decile). The GP is one of Germany’s most successful software focused GPs, with realised 3.1x MOIC across eight historical exits. Both Fund II and Fund III offer significant remaining upside potential. Specifically, Fund II is expected to achieve de-risking within the next 24 months, with full liquidation projected within three to four years. The transaction was facilitated by the GP without involvement of an intermediary, leveraging our long-standing relationship with the GP. We have been an early backer of Lea Partners via our Emerging Manager programme and we have subsequently built a broad investment relationship with LEA across funds, co-investments and GP-led transactions.
In March, we agreed to sell our stake in FORM alongside with Diversis Capital. Form is a SaaS mobile data collection platform for complex, business-critical use cases across a broad spectrum of sectors like banking, energy and food and beverage. Its solutions have helped mid to large organisations improve how they collect, manage and leverage data, and integrate it into current systems, transforming the way they do business. During our ownership, the focus was on operational improvements and strategic growth, including the 2021 acquisition of ShelfWise, resulting in the company trippling its revenues and growing EBITA by over five times. FORM was sold to Trax Retail, a portfolio company of Gemspring Capital, generating an attractive gross return.
Also in March, we closed an investment in SAPV Care GmbH alongside Capiton. SAPV Care GmbH provides specialised outpatient palliative care for people with incurable, advanced illnesses. Its multidisciplinary team of palliative care physicians and nurses improves quality of life, alleviates symptoms such as pain and shortness of breath, and enables patients to live with dignity until the end of their lives in the comfort of their own homes. The company operates seven locations across Rhineland-Palatinate and Saarland, covering 49 service areas with 110 employees. The specialized outpatient palliative care market is expected to continue growing at ~7% p.a. Key drivers include, demographic change, rising complex disease prevalence, and cost pressure shifting care to outpatient settings which provides regulatory tailwinds.
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