Key Private Equity Trends To Watch in 2026

This article was originally published in Crain’s New York Business and is reprinted with permission.

Private equity dealmaking is making a comeback, and many predict that activity will pick up in 2026. Global private equity transaction value increased by nearly 43% year over year in Q3 2025, according to S&P Global Market Intelligence. Transaction values rose to $258.52 billion, up from $181.34 billion in the same quarter last year.

Crain’s spoke with Matt Redente, managing partner of private equity at Crowe, a tax, audit, and consulting firm, for insight into key developments and what’s ahead in 2026. The Wall Street Journal reported in October that Crowe itself is in “explorative stages” of outside investment, as CEO Steven Strammello said in a firmwide e-mail, according to the story.

CRAIN’S: What key trends have shaped the private equity landscape in 2025, and do you see them as being as significant in 2026?

REDENTE: Dealmaking activity was down significantly in 2023 and 2024. The trend we began to see in 2025 is that M&A activity is starting to return, based on the over 500 private equity groups and over 1,400 of their portfolio companies that we work with. But the landscape of tariffs has impacted deals during the year. Now, the IPO market is starting to open. Crypto assets or anything related to AI is beginning to gain traction. And we’re also seeing more deals start to come through. So, we think in 2026, we will see a return more normal deal activity.

CRAIN’S: What legislative developments are likely to influence the private equity industry in 2026?

REDENTE: President Trump issued an executive order in August 2025 that directs the DOL and SEC to create regulations that will enable expand investment choices for 401(k) plans. It will enable 401(k) managers to incorporate alternative assets into retirement portfolios, allowing individuals with 401(k)s to invest their funds in these alternative assets, which includes private equity. Right now, that option is effectively closed. If it opens, that’s a potential whole new pool of capital available to private equity in the trillions of dollars. In 2026, we should get more clarity on that.

CRAIN’S: On the regulatory front, what key issues will shape private equity in the coming year?

REDENTE: If legislation allows investors to invest their 401(k) funds in alternative assets such as private equity funds, legislators will need to address the burden this places on employers and plan fiduciaries. If their 401(k) base is full of nonaccredited investors, do employers provide them with access to these investments and expose them to risks that they’ve never been exposed to before? If so, what caveats must they provide?

CRAIN’S: How has tax policy shaped private equity deals in 2025, and do you anticipate those trends continuing in 2026?

REDENTE: The One Big Beautiful Bill Act (OBBBA) is a major tax change — likely the biggest overhaul since the Tax Cuts and Jobs Act of 2017. It affects almost every part of private equity, from how deals are structured to how portfolio companies manage tax positions and how funds plan at the entity level. One of the most meaningful shifts is the update to IRC Section 163(j). By restoring depreciation and amortization to the Adjusted Taxable Income calculation, OBBBA effectively raises the cap on interest deductibility. The act also brings back full expensing in several key areas. It makes 100% bonus depreciation permanent for qualifying business and production property and introduces full expensing for Qualified Production Property. It also improves planning opportunities related to IRC Sec. 1202 gains and research and experimentation (R&E) expensing. At the same time, OBBBA adds complexity: state-level conformity is uneven, and new reporting requirements mean investors need to pay closer attention to compliance details.

CRAIN’S: What human capital challenges face the private equity industry, and do you see any innovative approaches to addressing them?

REDENTE: There is a human capital deficit in private equity at the portfolio company level. Across the industry, there is a shortage of individuals with the knowledge and depth to guide companies post deal close, ensuring they have the right management teams in place, all the way from finance to operations. In response, private equity groups are building up their in-house bench of executives rather than relying on hiring to augment the management team of the company they’re acquiring. They’re more hands-on in recruiting human capital for their different portfolios of companies, which means they have an in-house recruiting team. With deal-making accelerating, every group needs to make sure it has the bench strength necessary to execute its objectives.