Private Equity Fundraising Hits 4-Year Low: B2B Exits Get Tougher

The Gist

• U.S. PE fundraising dropped 27% from its 2023 peak to $296B in 2026
• Middle-market PE fundraising fell 43% in 2025, hitting B2B exits hardest
• VC fundraising outperformed PE, down only 3.6% as AI investments surged

• Private equity fundraising in the U.S. has hit a 4-year low, with annualized 2026 fundraising projected at $296 billion, down from $405 billion in 2023.
• Middle-market private equity fundraising fell by 43% in 2025, the steepest drop since 2018, impacting B2B companies seeking exits.
• Fewer private equity funds closing means fewer buyers and less competitive tension, which can lower acquisition prices for B2B companies.
• Venture capital fundraising has remained strong, with AI investments driving VC activity, while PE struggles due to lower returns.
• PE exits are becoming tougher for B2B founders, especially for companies with $10M to $75M in ARR, as mid-market sponsors face fundraising challenges.
• PE fundraising recovery depends on sustained high exit activity to restore LP liquidity, which may take several years.

• Focus on profitability and strong retention metrics to attract PE buyers in a tougher fundraising environment.
• Widen your exit process to maintain multiple credible bidders and ensure competitive tension.
• Monitor PE fundraising trends and adjust exit timing expectations, as recovery may take several years.
• Consider venture capital as an alternative funding or exit route, given its current strength compared to PE.

• $222 billion (U.S. PE fundraising through September 30, 2026.)
• $296 billion (Annualized U.S. PE fundraising projection for 2026.)
• $405 billion (PE fundraising peak in 2023.)
• 43% (Drop in middle-market PE fundraising in 2025.)
• 2,613 (Number of PE funds closing in Q1 2026, down 45.1%.)
• $481.6 billion (Value of PE deal activity in Q1 2026.)