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As private equity enters 2026, with volumes buoyed, the defining shift is not capital or opportunity, but a change in buyer behavior. Assets continue to come to market and processes are active. What has evolved is what buyers are willing to underwrite and where they expect growth to come from once they own the business.
In the current environment, deals are less about narrative quality and more about performance credibility. ICs are increasingly focused on whether an asset’s results are durable, explainable, and improvable under realistic ownership conditions. The central question has moved from “Is this an attractive company?” to “Where does growth actually come from, how resilient is it, and what will tangibly improve under new ownership?”
From the vantage point of Grant Thornton Stax, 2026 is shaping up as a year of selectivity. Buyers are not broadly bullish or bearish. They are targeted, and capital is increasingly concentrating in areas where value creation is visible and executable.
Assets Must Perform Under Tighter Capital Conditions
Financing markets have reset expectations. Higher rates, tighter underwriting, and more conservative leverage assumptions have pushed buyers to focus sharply on cash flow quality, margin durability, and downside protection.
Assets that continue to clear processes tend to demonstrate:
- Stable or recurring revenue with limited reliance on aggressive growth assumptions
- Evidence of pricing power or contractual economics
- Margin structures that hold up under scrutiny, not just at peak performance
LP expectations reinforce this discipline. Capital is increasingly directed toward assets where value creation is tangible and defensible, rather than dependent on future multiple expansion or macro normalization.
Growth Is Underwritten Through Execution, Not Optionality
Growth remains central to investment theses, but how it is evaluated has changed. Buyers are placing less weight on aspirational expansion stories and more on operationally demonstrable growth paths.
Assets that resonate most strongly with ICs typically show:
- Retention and customer behavior that support organic expansion
- Clear operational levers tied directly to margin improvement or efficiency
- Technology investments, including AI and automation, that already affect cost structure, speed, or decision-making
There is growing skepticism toward initiatives that sound compelling in diligence but fail to materialize post-close. Technology matters when it shows up in execution consistency, not when it remains conceptual.
Where We Expect M&A Activity to Concentrate Within Our Core Verticals
Based on ongoing dialogue with sponsors, we expect M&A activity in 2026 to remain focused within a defined set of sub-sectors across our core verticals. These are not simply attractive end markets in theory, but areas where capital is actively seeking deployment given a convergence of performance visibility, operational levers, and near-term value creation opportunity.
Healthcare
Behavioral health and outpatient specialty care
Behavioral health continues to see strong sponsor interest as demand growth remains durable, access gaps persist, and outpatient models offer scalability without the same capital intensity as acute care. In 2026, buyers are particularly focused on platforms where referral flow, clinician utilization, and payer mix can be actively managed, creating clear levers for growth and margin improvement.
Revenue cycle management and tech-enabled cost takeout
Revenue Cycle Management (RCM) remains in focus as providers face sustained margin pressure and labor scarcity. These assets are attractive not only for their recurring revenue profiles, but because performance improvement is measurable and near-term. Automation, analytics, and AI-driven workflow improvements are increasingly underwriting critical components rather than upside optionality.
Home-based and post-acute care platforms
As care continues to shift out of hospital settings, sponsors are leaning into scaled home-based models where operational discipline, scheduling efficiency, and payer contracting can materially improve economics. In 2026, buyer interest is centered on platforms that have already demonstrated an ability to manage complexity at scale rather than simply capture demand growth.
TMT (Technology, Media, and Telecom)
Vertical SaaS serving regulated or workflow-critical environments
Deal activity remains concentrated in vertical software platforms embedded in daily operations across healthcare administration, insurance, education, and construction. These assets are attractive in 2026 because retention, pricing power, and expansion are increasingly proven rather than theoretical, allowing buyers to underwrite growth with greater confidence.
Data capture and systems-of-record platforms
Sponsors continue to favor software that controls the point of data creation, particularly where that data feeds downstream automation, analytics, or AI use cases. ICs are prioritizing platforms where data is already monetized or operationalized, rather than future-state AI narratives.
Payments-adjacent software, fraud, and risk infrastructure
Platforms supporting payments enablement, fraud prevention, identity verification, and investigation workflows are seeing heightened interest. In 2026, the driver is increased transaction velocity, real-time risk requirements, and regulatory scrutiny, all of which favor scaled, workflow-embedded solutions.
Services (Including Industrial Services)
Environmental and compliance-driven services
Environmental services, testing, and remediation remain highly active due to regulatory complexity, recurring demand, and resilience across cycles. In 2026, buyers are particularly attracted to platforms that combine compliance mandates with opportunities for geographic density and operational standardization.
Inspection, testing, and monitoring services
These assets continue to attract capital as they sit at the intersection of regulation, safety, and infrastructure investment. Activity is being driven by mandated inspection regimes, high customer switching costs, and the ability to scale through add-ons while maintaining consistent margins.
Field-based infrastructure and specialty industrial services
Sponsors remain focused on services tied to critical infrastructure, including utilities, power, water, and transportation. In 2026, the appeal lies in multi-year demand visibility, labor-driven barriers to entry, and the opportunity to professionalize operations in fragmented markets.
Consumer and Commerce Enablement
Payments, loyalty, and customer engagement infrastructure
Consumer-facing platforms that support payments, loyalty, and retention are seeing renewed interest as brands refocus on unit economics and lifetime value. In 2026, buyers are underwriting these assets based on their ability to support repeat engagement and monetize first-party data rather than pure volume growth.
Automotive aftermarket and specialty retail enablement
Tech-enabled services supporting fragmented consumer end markets, particularly automotive aftermarket and specialty retail, continue to attract sponsor interest. These sub-sectors benefit from stable demand, operational complexity, and opportunities to improve pricing, logistics, and customer engagement.
Fraud, identity, and trust solutions impacting consumer transactions
As digital commerce accelerates, platforms that protect transactions and reduce fraud are increasingly viewed as core infrastructure. Buyer interest in 2026 is driven by rising fraud sophistication, regulatory pressure, and the need for real-time decisioning at scale.
Across these sub-sectors, activity is concentrating not simply because of favorable fundamentals, but because sponsors see clear, executable paths to value creation today. As deal flow tightens around these areas, firms with repeat exposure over time, supported by advisors with accumulated sub-sector pattern recognition, are better positioned to underwrite risk accurately, move decisively, and execute post-close.
Exit Outcomes Reflect Asset Quality, Not Market Timing
Exit markets remain selective, but assets with clear performance narratives continue to transact. Buyers are underwriting exits based on whether growth and margin expansion are credible to the next owner, not on expectations of broader market recovery.
Strategic exits, secondary buyouts, and partial liquidity events are all viable paths, but the common denominator is operational credibility and demonstrated progress.
Conclusion
Private equity in 2026 is defined less by macro swings and more by focus. Buyers are selecting assets with defensible performance, clear growth levers, and exposure to sub-sectors where demand and deal activity remain strong. Growth is expected to be earned through execution, not assumed through narrative.
At Grant Thornton Stax, we see 2026 as a year where understanding where capital is concentrating, why it is doing so, and how value is created inside assets will continue to separate winners from the rest. Visit our Insights page to learn more about our expertise.
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