Private equity firms are moving down market.
As dealmaking has slowed across the industry, sponsors are turning to smaller deals to put capital to work:
LMM buyouts jumped 56% since last quarter
$100M–$500M transactions sank to the lowest level since 2023
Capital is concentrating in fewer, larger transactions
Read the full breakdown below.
This Week’s Data
Private Equity Enters Q4 Focused on Selectivity (CohnReznick)
Middle Market PE Firms Move Down Market (PitchBook)
Moving Down Market
The lower middle market was a bright spot for private equity in 2Q’26.
Buyouts valued from $25M to $100M totaled 413 deals worth $16B. This represented a 56% rise in deal count and 71% jump in deal value from the prior quarter, per PitchBook.1
The $25M to $100M segment was the only part of the market to grow. Activity across other deal sizes declined sharply.
Weakening Activity
Outside the lower middle market, dealmaking has slowed as buyers and sellers struggle to agree on price.
High borrowing costs and elevated multiples have made the deal math harder for buyers. Meanwhile, sellers have been reluctant to accept lower prices, particularly for companies acquired at peak valuations in 2021–22.
This bid-ask spread has stalled much of the market. Deal value in the $100M to $500M range fell to $54B in 2Q’26, the lowest level since 2023.2