Chart of the Week
Oct 9, 2026
2 MIN READ
Middle market deals gain focus as PE market evolves
New
U.S. private equity deal volume has fallen 14% this year, while deal count has risen 6%, highlighting a shift toward the middle market.
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Annual change in U.S. private equity deal activity
Pitchbook, as of September 30, 2026.
- 2025 was the year of the megadeal: U.S. private equity deal value rose 36%, significantly outpacing the 4% increase in deal count as the market reached a new record for billion-dollar-plus transactions.1
- That pattern has reversed in 2026. Through Q3, deal value is down 14% even as deal count has risen 6%, indicating that activity is shifting toward smaller transactions. More transactions are being completed with fewer total dollars, pointing to smaller average deal sizes and a greater role for the middle market.1
- The change has been particularly pronounced in the tech sector. After 39 technology megadeals in 2025, only 10 were completed through the first three quarters of 2026. Overall dollar investment into the sector is down 56% from 2025 as investors assess AI’s potential impact on software business models.1
- With technology megadeals contributing less to overall activity, smaller transactions are accounting for a greater share of dealmaking, creating a favorable backdrop for middle market companies.