Eight Factors Driving Increased M&A Activity in 2026

Private equity is expected to make a comeback in the year 2026, according to Jeff Jacobs, who serves as the head of M&A and COO of investment banking at Solomon Partners. Jacobs expressed optimism about the future of private equity, noting that the industry has shown signs of growth and resilience.

Market experts believe that various factors will contribute to the resurgence of private equity in the coming year. These factors include a favorable economic environment, increased investor confidence, and a strong appetite for mergers and acquisitions. Jacobs pointed out that private equity firms have been actively seeking out new investment opportunities, particularly in sectors such as technology, healthcare, and consumer goods.

One key driver of the expected resurgence in private equity is the availability of capital. Investors are looking to put their money into alternative assets like private equity as they seek higher returns in a low-interest-rate environment. Additionally, the ongoing recovery from the global pandemic has created opportunities for private equity firms to acquire undervalued assets and drive growth through strategic investments.

Another factor contributing to the positive outlook for private equity is the increasing alignment of interests between investors and fund managers. Investors are becoming more sophisticated in their approach, demanding greater transparency, accountability, and alignment of incentives from private equity firms. This trend is expected to continue in 2026, with firms focusing on building strong relationships with their investors and delivering value through active management of portfolio companies.

Despite the favorable conditions for private equity, there are also challenges that firms will have to navigate in the coming year. Increased competition for deals, rising valuations, and regulatory uncertainty are among the key challenges facing the industry. Firms will need to stay agile and innovative in their approach to deal sourcing, due diligence, and value creation in order to succeed in a competitive market environment.

Overall, the outlook for private equity in 2026 is positive, with industry experts expecting a resurgence in activity driven by favorable economic conditions, strong investor demand, and increasing alignment of interests between investors and fund managers. As private equity firms adapt to the changing landscape and navigate potential challenges, they will have opportunities to capitalize on market trends and generate attractive returns for their investors.