Private equity buyouts have plunged dramatically, with deal values falling by more than a third in the first quarter of 2026. Alexandra Heal reports that private equity groups agreed acquisitions worth $172bn in the three months to March, marking a 36 per cent decline from the previous quarter and an 8 per cent drop from the same period last year.

Dealmakers are warning that fears over AI's impact on software businesses and the war in the Middle East are fueling further uncertainty. Several buyout executives and advisers said firms are now holding off on signing any deals due to market turmoil sparked by the Gulf conflict. The head of a large European buyout group described the current period as "one of the most turbulent" in memory, with activity grinding down quickly.

The sector has struggled since 2022, with firms unable to sell companies they bought during the previous decade of low interest rates. Private equity funds raised $86bn globally in the first quarter of 2026, according to PitchBook, making 2025 the industry's weakest year for fundraising since 2018.