Private equity braces for EUR 110 bn fundraising glut as exits stall

Private equity firms are planning to raise three times as much funding in 2026 as they have this year, the Financial Times reports. Ten big European buyout houses are expected to seek more than EUR 110 bn next year — compared to the roughly EUR 34 bn they are set to secure this year — a surge that could force LPs to pick top performers and leave weaker managers short of capital, the FT quotes advisory firm Campbell Lutyens as saying.

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This is despite a wave of fundraising fatigue in the industry. Campaigns now take “twice as long” compared to the industry’s heyday, with LPs often insisting on distributions before re-upping against the backdrop of slow exits and lower returns. Advent, Nordic Capital, and Permira are set to remain in market into next year, while Cinven and PAI prepare fresh vehicles. Among this year’s closings are Hg, Ardian, and Oakley.

How slow are we talking? At the current pace, it could take nine years for LPs to recoup capital from the 12k+ companies held by US buyout funds, Bloomberg wrote recently. Dry powder stood near USD 1.2 tn by mid-2025 — about a quarter of what was pledged at least four years ago — while quarterly returns slid from roughly 13.5% in 2Q 2021 to 0.8% in 4Q 2024. Higher financing costs and a lack of promising takeover targets are also weighing on the asset class’ activity.

Managers are leaning on workarounds. Continuation funds and secondaries have surged — accounting for about USD 103 bn of transactions in 1H 2025, with a record USD 302 bn of capital raised for the strategy — but many LPs still prefer traditional exits and view continuation vehicles warily.

Even industry leaders are feeling the strain. Insight Partners cut its flagship target from USD 20 bn to USD 15 bn and still closed around USD 11.5 bn. Apollo, Blackstone, and Carlyle have missed targets and are diversifying into credit, infrastructure, and ins., while Apollo’s Jim Zelter warned of a coming “natural washout.”

The shakeout is pushing investors to be more selective. Texas Teachers is trimming exposure to mega-funds and pivoting toward mid-market managers as performance comes under a “very, very bright light,” advisers say.

Exit pressures are also showing up in public markets. London-listed Petershill Partners blamed weak exit prospects for share-price pressure and said it would delist and return about USD 900 mn to shareholders.

MARKETS THIS MORNING-

Asian markets are mostly in the green, as Sony’s shares surged 36% on its market debut on the Tokyo Stock Exchange and South Korea’s Kospi rose 1.2%. Hong Kong’s Hang Seng also gained 1.2%, while mainland China’s CSI 300 was flat and Japan’s Nikkei fell 0.84%. Over on Wall Street, futures are flat after a losing week.

THE CLOSING BELL: TADAWUL-

The TASI fell 0.7% yesterday on turnover of SAR 4.9 bn. The index is down 6.7% YTD.

In the green: Chubb (+10.0%), Cenomi Retail (+10.0%) and Obeikan Glass (+9.9%).

In the red: Sisco Holding (-3.6%), Jadwa Reit Saudi (-3.3%) and Alrajhi (-3.2%).

THE CLOSING BELL: NOMU-

The NomuC remained unchanged yesterday on turnover of SAR 36.2 mn. The index is down 19.1% YTD.

In the green: Jana (+9.5%), Taqat (+7.3%) and Aljouf Water (+6.9%).

In the red: Atlas Elevators (-9.0%), Balady (-8.0%) and SMC (-7.5%).

CORPORATE ACTIONS-

Saudi Ground Services’ board greenlit a SAR 188 mn dividend payout for 1H 2025 at SAR 1 per share, it said in a disclosure to Tadawul yesterday. The distribution date is set for 27 October.

Northern Region Cement’s board approved a SAR 45 mn dividend payout for 1H 2025 at SAR 0.25 apiece, it said in a disclosure to Tadawul yesterday. The payout is set for Thursday, 16 October.