PE Fundraising Confidence Is Rising, but the Playbook Has Changed

The latest S&P Global Market Intelligence Private Equity Survey, released April 13, paints a nuanced picture of the private equity landscape heading into mid-2026. Fundraising confidence is climbing, deal volumes are expected to hold steady, and the industry's center of gravity has shifted decisively toward operational improvement as the primary lever for generating returns. For business owners considering a PE partnership or exit, the implications are significant.

What the Survey Found

S&P Global surveyed private equity fund managers, venture capitalists, and limited partners in February 2026. The headline numbers tell a story of cautious momentum. Fifty-nine percent of general partners report being either highly optimistic (21%) or cautiously optimistic (38%) about hitting their 2026 fundraising targets. On the deal side, 38% of GPs expect transaction volumes to increase this year, while 40% expect activity to remain at current levels.

The valuation outlook is less encouraging. Only 20% of respondents expect valuations to improve, and 28% anticipate deterioration. That gap matters. It suggests that while more capital is being raised and deployed, buyers are not willing to pay the premiums that sellers might remember from the 2021 and 2022 vintages.

The fundraising challenges are worth noting as well. Shifting investor priorities ranked as the top obstacle, cited by 47% of respondents. Limited partners are increasingly selective about where they commit capital, favoring managers with demonstrable track records in operational improvement over those relying primarily on leverage and multiple expansion.

The Operational Value Creation Shift

The survey's most consequential finding is the degree to which operational improvement has become the dominant value creation strategy. Seventy-two percent of GPs ranked operational improvements as their top lever for generating returns, and 71% specifically prioritize operational gains over financial engineering.

This is not a subtle shift. For the past two decades, private equity returns were largely driven by a combination of financial leverage, multiple expansion (buying at lower multiples and selling at higher ones), and favorable market timing. Higher interest rates have compressed the effectiveness of leverage. Tighter credit markets have reduced the availability of cheap debt. And with valuations expected to remain flat or decline, multiple expansion is no longer a reliable tailwind.

What remains is the fundamental work of making companies operate better. That means improving margins through process optimization, investing in technology and automation, strengthening management teams, and building scalable infrastructure. A Gain.pro study cited alongside the S&P data found that 71% of the value created in 2024 PE exits came from revenue growth, up from 64% in 2023. The direction is clear.

What This Means for Business Owners

If you are running a company that might attract PE interest, whether as a platform acquisition, an add-on, or a growth equity investment, the survey findings carry practical implications.

First, operational readiness matters more than ever. PE buyers are conducting deeper operational due diligence before writing checks. They want to see clean processes, documented workflows, strong middle management, and measurable efficiency metrics. A company with strong revenue but disorganized operations will face either a lower valuation or a longer diligence process.

Second, the emphasis on operational improvement means that PE firms are looking for companies where they can identify specific, achievable gains. A manufacturing business with identifiable waste in its supply chain, a services firm with inconsistent delivery processes, or a technology company with high customer acquisition costs but low retention: these are the profiles that attract operational-minded buyers. The key is that the improvement opportunity needs to be visible and quantifiable, not theoretical.

Third, financial engineering alone will not bridge valuation gaps. Sellers who expect to command 2021-era multiples based solely on revenue growth are likely to be disappointed. The market is pricing in the cost of capital. Business owners preparing for a transaction should work with their advisors to understand what current comparable multiples look like in their sector and size range, and to build a realistic valuation thesis grounded in sustainable earnings.

The Fundraising Picture

The fundraising data tells its own story. While confidence is rising, capital remains concentrated. U.S. venture fundraising reached $47.8 billion in Q1 2026, but much of that capital flowed to a handful of mega-firms. In private equity, the pattern is similar: established managers with strong operational track records are raising capital effectively, while first-time or smaller funds face a more difficult environment.

For business owners, this concentration matters because it affects who is likely to be at the negotiating table. Larger, well-capitalized PE firms tend to have dedicated operational teams, portfolio management resources, and established playbooks for driving improvement. Smaller funds may bring more flexible deal structures but fewer post-acquisition resources.

Understanding who your likely buyers are, and what their operational capabilities look like, should be part of any pre-transaction planning process. The days of PE firms writing a check and waiting for market appreciation are largely over. Today's buyers expect to be active partners in building value.

Looking Ahead

The S&P survey data aligns with a broader theme across the deal market in 2026: conviction is replacing momentum. Dealmakers are being more selective, more rigorous in their diligence, and more focused on sustainable value creation. The PE firms that thrive in this environment will be those that can genuinely improve the companies they acquire, not just restructure their balance sheets.

For business owners, this is actually encouraging. It means that well-run companies with real operational substance will command attention and fair pricing. The market is rewarding quality over hype. The preparation required to attract that attention, however, is more demanding than it was a few years ago.