Investors Shift Capital From Private Equity in Q3 2026
Market participants are reallocating capital toward infrastructure and private credit as traditional equity activity slows.
Updated on Oct. 16, 2026 in Corporate Finance
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Private equity firms reported lower merger and acquisition activity in the third quarter of 2026 compared to historical averages. Investors are increasingly favoring infrastructure and private credit products over traditional private equity as firms struggle to exit investments.
Why it matters
Sponsors are choosing to hold investments longer due to current incentive structures, leading limited partners to seek returns in alternative debt and infrastructure assets. This shift persists while asset valuations remain higher than the levels required for successful monetization.
Goldman Sachs reported $1.65 billion in advisory fees for the third quarter, an 18% increase year-over-year. Meanwhile, Man Group saw private markets assets under management contract from $17.6 billion to $17.4 billion.
The players
Goldman Sachs
Goldman Sachs is a leading global investment banking, securities, and investment management firm.
BlackRock
BlackRock is the world's largest asset manager, providing investment management, risk management, and advisory services.
EQT
EQT is a global investment organization focused on private equity and real assets.
Man Group
Man Group is a global active investment management business headquartered in London.
Wells Fargo
Wells Fargo is a diversified financial services company providing banking, investment, and mortgage products.
The details
While private equity faces headwinds, EQT recorded €10.9 billion of net inflows into key funds and acquired Stockbridge for $550 million. Concurrently, Wells Fargo increased its alternative product offerings by over 30% in 2026, even as CoreWeave bonds reached distressed levels by October.
Timeline
The reporting period for major financial institutions occurred during Q3 2026.
CoreWeave bonds hit distressed levels in October 2026.
State Street expects to deliver a tokenised fund servicing capability by the end of 2026.
Market Dynamics
This decline in traditional deal flow marks a significant departure from the historical average for private equity merger and acquisition activity. The trend reflects a broader shift as capital markets adapt to prolonged high-interest environments and changing exit incentives.
Retail and institutional investors may face fewer traditional private equity opportunities as capital shifts toward credit and infrastructure. Portfolios may require adjustments to align with these changing institutional product offerings and market volatility.
The takeaway
The move toward infrastructure and private credit suggests a long-term adjustment in how institutional capital is deployed outside of equity markets. Investors should monitor whether these alternative products maintain their growth trajectory as hyperscaler capital expenditures continue.
What happens next
State Street is scheduled to launch its tokenised fund servicing capability by the end of 2026.
Further reading
Learn more about the latest trends in Corporate Finance to understand shifting market allocations.
Source note: This article includes information reported by Private Equity Wire.
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