At least one expert sees private equity in position for “a breakout 2026.”

That’s one of the findings shared on Wednesday by Cherry Bekaert, which published its fifth annual year-end Private Equity (PE) Industry Report, detailing the market forces and strategic shifts that propelled private equity’s 2025 M&A deal value to more than $1.2 trillion.

Cherry Bekaert, ranked among the largest assurance, tax, and advisory firms in the U.S., said this development marks only the second time in history that buyout activity has crossed the trillion‑dollar threshold, trailing only the record levels of 2021.

The report noted record megadeals, rising exit activity, strong add‑on volume and significant dry powder levels. With improving economic clarity and a pro‑business climate, the outlook indicated continued momentum heading into 2026.

Featuring data provided by Pitchbook and other sources, including proprietary firm insights, the report analyzed the PE mergers and acquisitions (M&A) landscape while highlighting sector trends shaping opportunities for funds, investors and financial sponsors in 2026.

Despite a tariff-induced slowdown early in the year that prompted many investors to pause dealmaking, Cherry Bekaert mentioned that activity rebounded in the second half as economic clarity improved and risk appetite returned.

By year end, report authors said PE activity skyrocketed ahead of 2024, with most metrics signaling sustained momentum for 2026.

Other key findings from the report included:

—Megadeals (transactions exceeding $1 billion) reached a record $568 billion in value across 150 deals

—Exit activity surged with double-digit growth, breaking years of stagnation

—Add-ons remained the dominant strategy, though easing interest rates may support increased platform buyout activity

—Corporate divestitures of non-core assets created attractive carve-out opportunities for PE buyers

—Fundraising continued its decline, marking the weakest year since 2020

—Dry powder reached approximately $1.1 trillion, underscoring the imbalance between robust deal activity and subdued capital formation

“After navigating a turbulent few years, PE leaders are ready for a breakout 2026,” said Scott Moss, partner and financial services industry leader with Cherry Bekaert.

“A pro-business climate and falling rates are boosting confidence, but success requires more than just showing up — funds must boldly evolve their strategies to capitalize on this window of opportunity,” Moss continued in a news release.

The report’s 2026 outlook anticipates a period of renewed momentum and structural evolution following several years of market recalibration.

“With improving market conditions, private equity firms are placing greater emphasis on operational value creation, digital transformation and AI-driven efficiencies rather than relying primarily on leverage,” Cherry Bekaert said.

The full report is available here.