Private Markets 2026: “Normalization” Becomes an Opportunity (Europe vs. US)

After two years dominated by rising interest rates and reduced liquidity, 2026 marks a regime shift in private markets. While the euphoria of 2021 is not returning, the market is entering a healthier cycle characterized by greater price discipline, a gradual reopening of exit windows, and a quality premium focusing on resilient assets capable of generating cash flow and managers with strong operational capabilities.

Partners Group anticipates a “central scenario” of 2% global growth (5-year average) and inflation between 3.5% and 4%, with a gradual decline in key interest rates (Fed ~3%, ECB ~1.25%). This environment is expected to support both private market investments and exits. https://fundsmagazine.optionfinance.fr/analyses/private-equity-et-creation-de-valeur-mythe-ou-realite.html Private Equity – Activity Returns, but Price Is No Longer Everything

Between 2020 and 2024, a significant portion of private equity performance was driven by rising valuation multiples, fueled by strong deployment pressure on raised capital. In 2026 and for the next cycle, the drivers are different: buy better, improve portfolio companies, and exit smartly.

United States: Price Normalization, Activity Resumes

Valuations are stabilizing: the average US buyout multiple returned to 12x EV/EBITDA (12 months ending September 2025), down from 12.8x in 2024, closer to pre-COVID standards.

For wealth investors, this signals that 2026 performance will rely less on multiple expansion and more on operational improvements and company growth.

Liquidity: Exits are picking up, though unevenly, and remain driven by very large transactions. Exit value in the US fell 41% in Q3 vs. Q1 ($126B) but reached $516B YTD, already above the total for 2024.

Trends to watch in 2026:

1. Growth of platform LBOs, consolidating fragmented markets, expected to represent ≥25% of total US investment activity.

2. Increased fundraising concentration: first-time funds face difficulties, raising only $8.4B via 41 funds in 2025, a historic low.

Europe: Attractive Valuations with a Resurgence in Exits

Europe remains attractive due to its mid-market orientation and generally lower valuations compared to the US. This trend is reinforced by US investors, who accounted for 38% of European deal value in the first three quarters of 2025 (up from 31% in 2024), a dynamic likely to continue in 2026.

Exits are recovering: Q3 2025 exit value jumped to €98B (+80% vs. previous quarter), with deal volume increasing 23%.

IPOs are restarting more selectively: 115 IPOs YTD in 2025 versus 181 in 2024, but with significantly higher quality. Profitable IPOs now account for ~90% YTD, compared to 66.4% in 2024.

Key trend: The stock of companies backed by private equity far exceeds the public market. The ratio of private equity-backed companies to public companies reaches 2.3x, a record—highlighting that a growing share of economic growth is private, and traditional public equity allocations no longer cover the full economy.

Private Debt – Attractive Returns for Selective Investors

United States: Spread Compression, Liquid Market Competition

Direct lending activity remains robust, but competition from syndicated loans and retail vehicles is pressuring margins. Future returns will depend heavily on selectivity.

We recommend targeting less correlated segments, such as asset-based finance or specialized credit niches, to maintain diversification and a resilient profile.

Semi-liquid vehicles are expanding rapidly, contributing to margin pressure, with ~$350B in assets under management at the end of 2024 (+60% in two years).

Europe: Relative Advantage in Spreads and Protection

Private debt offers better relative value in Europe: wider spreads, lower leverage, and stronger creditor protections.Market bifurcation is expected: large-cap direct lending may underperform due to margin compression, while selective mid-market lending remains better remunerated and more resilient.

Liquidity: Secondary markets increasingly provide liquidity. H1 2025 saw $103B transacted (+51% vs. 2024), with projections exceeding $210B for the full year.

2026 Risk: High yields must be distinguished from poor credit analysis. Recent defaults (e.g., First Brands, Tricolor) illustrate the consequences of insufficient credit diligence.

Infrastructure – The Long-Term Wealth Asset Benefiting from Megatrends

Infrastructure continues to play a central role in long-term portfolios.

United States: Growth Driven by AI

The AI boom is driving demand for data centers, requiring $3.7 trillion in investments over the coming years even in a moderate scenario.US electricity demand could grow 8% over 5 years, largely due to data centers, three times faster than estimates two years ago.

Performance: Private infrastructure funds achieved ~11% annualized IRR over 5–10 years. For long-term investors, the asset class is attractive due to its yield and inflation protection.

Europe: Growth Supported by Energy Transition

European infrastructure benefits from contractual cash flows and acts as a portfolio stabilizer. Europe captured 34% of global private capital raises in 2025, with $57B raised in infrastructure funds through September (projected >$75B).In 2026, focus areas include networks, mobility, energy, and regulated assets, with political and regulatory risks being the primary considerations.

Evergreen / Semi-Liquid Structures – Organized, but Not Guaranteed Liquidity

Evergreen / semi-liquid funds (often with redemption windows) are expanding, offering investors access to private markets without locking capital for 8–12 years.Assets under management exceeded $640B by mid-2025, representing exponential growth.

Caution: “Semi-liquid” does not mean “liquid like cash.” Liquidity depends on:

• Cash reserves

• Gate mechanisms

• Diversification

• Ability to sell assets (especially via secondary markets)

Properly structured evergreens are poised to be a key format in 2026, making private markets more accessible and regular, and easier to integrate into a strategic wealth allocation.

Conclusion – 2026: A Healthier Cycle and Strategic Confirmation for AirFund

At AirFund, these outlooks highlight the rationale for our strategy:

• Focus on buyouts and infrastructure, primarily mid-market, with a preference for Europe.

• In a normalizing environment, these segments offer better performance-to-risk potential due to price discipline, operational proximity, and resilience.

Coupled with structured diversification (strategies, managers, vintages, geographies), this approach enables the construction of robust portfolios capable of absorbing market cycles while capturing growth from essential private market assets.

2026 also marks a milestone with the introduction of evergreen funds, providing a more regular, readable, and patrimony-aligned access to private markets, while maintaining strict standards for asset quality, liquidity management, and risk control.