McKinsey's Global Private Markets Report 2026: A Clearer View, Tougher Terrain

McKinsey's 2026 Global Private Markets Report captures a market at an inflection point. Global PE deal value increased 19 percent in 2025 to $2.6 trillion. Buyout deal value alone reached nearly $1.8 trillion — up 20 percent from 2024 and the second-highest year on record. By almost any measure, 2025 was a strong year for private markets activity. The complexity lies in the texture of that strength and what it signals about the operating environment ahead.

The growth was not evenly distributed. Deals larger than $500 million increased 44 percent in value to $1.1 trillion — a record for that size tier. Buyout deal count, however, declined 5 percent. The conclusion McKinsey draws is one that boutique advisory firms should absorb carefully: volume growth is happening at the top of the market. The midmarket is active, but the headline statistics are being driven by large transactions that boutique firms do not typically participate in.

The valuation expectations gap

One of the most operationally significant findings in McKinsey's report is the persistent valuation gap between buyer and seller expectations — particularly for assets below 'A'-grade quality. Buyers are underwriting for softer demand and late-cycle risk. Sellers, particularly owner-managers who have been watching public market recoveries, are anchoring to resilient growth assumptions and rejecting what they see as discounted offers.

This gap is what kills processes. It's the reason a boutique advisory firm can run a well-prepared, well-marketed process and still not produce a transaction — because the seller's expectations were shaped by a different data environment than the one buyers are actually pricing from. Managing expectations at mandate inception, with specific reference to current market evidence, is one of the highest-value things a boutique advisor can do.

Scale or specialise: the stark choice for midmarket GPs

McKinsey identifies a strategic binary for midmarket private equity GPs: scale up through consolidation and partnerships, or specialise deeply through sector focus, geographic advantage, or proprietary sourcing. This dynamic directly affects the advisory market. Boutique advisory firms advising midmarket PE-backed businesses need to understand the strategic posture of their buyer universe — a GP that is scaling will evaluate acquisitions differently from one that is doubling down on sector specialisation.

The days of the undifferentiated midmarket PE firm are numbered. For advisory firms, that means knowing your buyers' strategy as well as you know your seller's business.

Europe as a relative opportunity

McKinsey notes that the multiple disparity between North American and European assets widened to 2.0x in 2025, with multiple GPs viewing quality European assets as attractively priced relative to US equivalents. For boutique advisory firms operating in European midmarkets, this creates a cross-border buyer angle that is more credible now than it has been in several years. PE funds with dry powder and a mandate to deploy at lower entry multiples are actively looking at European opportunities — and boutique advisors who can credibly present assets to that buyer universe have a differentiated proposition.

The hold period signal

The median hold period for midmarket PE-backed companies reached 6.4 years at year-end 2025, up from 5.8 years the prior year. For advisory firms tracking potential sell-side mandates, this data point is an origination signal: a significant cohort of portfolio companies acquired in 2018–2020 are approaching the end of typical hold periods and will be looking for exits over the next 12–24 months. That's a pipeline for boutique advisors who map PE ownership in their target sectors.

Source: Global Private Markets Report 2026 — Private Equity — McKinsey & Company.