Global M&A volumes to rise 18% as buyout firms target IPOs

A logjam of unsold portfolio companies has buyout firms racing to list assets as a nascent IPO revival opens a narrow window for exits.

A rekindling of initial public offerings is fueling private equity hopes for a broad exit revival, though mixed debut performances and volatile markets are keeping the window for new listings narrow as of June 2026.

"So far the recovery has been skewed towards mega-deals, as evidenced by a stronger rebound in aggregate deal value than in transaction count," Goldman Sachs strategists wrote in a note, as the bank lifted its Stoxx 600 targets and flagged building M&A momentum.

Goldman's financials team forecasts around 18% growth in global M&A volumes over the next 12 months. Blackstone raised $13.1 billion for its largest Asia private equity fund, exceeding its $10 billion target and more than doubling its previous vehicle. EQT raised $15.6 billion to create the region's largest private equity fund, while Bain Capital has collected about $10.5 billion for its sixth pan-Asia buyout fund.

The exit logjam represents billions in unrealized value for buyout firms that accumulated portfolio companies during the 2021-2022 deal boom. If the IPO window stays open, it could unlock liquidity for limited partners and encourage further PE investment activity. If it closes, firms may be forced to pursue strategic sales at discounted valuations or hold assets longer than planned.

The second-half 2026 pipeline is supported by corporate portfolio simplification, with a record share of UK CFOs citing asset disposals as a top priority, according to Goldman Sachs. Private equity pressure to return capital through exits is also building, with the IPO market outside the US still subdued.

European M&A is lagging the global recovery, with the region's share of global deal activity falling to less than one-third of total volume. When deals do occur, they are increasingly led by foreign buyers attracted by valuation discounts relative to US assets. "Domestic buyers remain sidelined, reflecting weak local risk appetite," the Goldman strategists said.

Goldman highlighted European small and mid-cap stocks as potentially compelling M&A targets, with the STOXX Small Caps index trading at 13.5 times forward earnings and near record discounts to large caps. The bank said a broadening of deal activity beyond mega-deals would act as a key driver for the segment, which markets are not yet pricing in.

In Asia, the fundraising momentum is translating into deal activity. Blackstone has invested more than $7 billion in 12 deals in India and Japan over the last two years, including Indian AI cloud platform Neysa and Japan's engineering services provider TechnoPro. The firm also exited 15 companies during the period, including through the listings of International Gemological Institute and Aadhar Housing Finance.

Vietnam's private capital market is also maturing. Total private equity and venture capital deal value doubled to $370 million in 2025, while deal count dropped 30% to just 36 transactions, indicating more disciplined capital allocation. The country's M&A and private capital market registered approximately $8.7 billion in deal value last year, according to the Vietnam Innovation and Private Equity Investment Report 2026.

The IPO Window's Fragile Opening

The rekindling of IPOs comes after a prolonged drought. Since 2022, rising interest rates and geopolitical uncertainty had largely shut the public listing route for PE-backed companies. Now, with the Federal Reserve's rate-cutting cycle underway and equity markets near records, firms are testing the waters again.

But the window remains narrow. Mixed debut performances have made investors selective, favoring companies with proven profitability and clean governance over growth-at-any-price stories. Due diligence cycles have extended to nine to 12 months, and capital is concentrating on institutionally ready operators, according to Thien Viet Securities, which expects to partially or fully divest one to three of its current investments over the next 12 to 18 months.

The last time IPO markets opened this broadly for PE exits was in 2021, when low interest rates and pandemic-era liquidity drove a record $1.2 trillion in global IPO proceeds, according to EY data. That window closed abruptly in 2022 as the Federal Reserve began its most aggressive tightening cycle in decades. The current reopening, while promising, lacks the liquidity tailwind that powered the 2021 boom.

This article is for informational purposes only and does not constitute investment advice.