For corporate finance professionals, 2026 is shaping up to be a year of opportunity.
As we highlighted in our blog about M&A predictions for 2026, record levels of private equity dry powder are expected to reshape the UK deal landscape. But beyond the headlines lies a more important story: where this capital will be invested, how it will influence deal activity, and what it means for the professionals responsible for delivering those transactions.
How did we get here? Where is this dry powder likely to be deployed? And, as investment activity accelerates, which skills and professionals will be in greatest demand to originate, execute and complete these deals?
Record Levels of Dry Powder
KPMG’s 2026 UK Private Equity Landscape showed that huge levels of dry powder were available in 2025, largely accumulated over a matter of years. UK-based private capital is estimated to hold £190bn in undeployed funds, expected to be available to invest over the next three-to-five years.
UK Private Capital reported that fundraising reached £59bn in 2025, up from £35bn in 2024, and the third-highest total on record. This aggressive growth has come at the same time as deployment slowed, as commitments to invest outpaced expenditure. But why?
Deal Selectivity
According to KPMG’s private equity M&A review from February, UK deal volumes fell in 2025 by 10%, even as overall deal value increased. It is a clear indication that investors have become more selective: less willing to make uncertain deals, less willing to bridge valuation gaps, less likely to get the go-ahead from stricter investment committees.
There’s also the reality of deals taking longer, as persistent exit bottlenecks keep capital tied up in existing portfolios. The capital is available, but the threshold for deployment has risen. Firms are increasingly looking for assets with reliable revenue streams, defensible margins, and resilient management teams that have demonstrated experience with volatile markets before.
For many firms, the time has come to invest.
Exit Pressure
One of the fundamental drivers of private equity M&A is the need for exits to return capital to investors. Exit markets are stronger than they have been in recent years.
BCG suggested in January that “improving sentiment in key regions and sectors [is creating] fertile ground for renewed activity”, a trend that has been materialising through 2026. Reuters reported that UK M&A activity reached a record $192bn year-to-date by May, more than triple the amount recorded at the same point in 2025 (although it should be stated a lot of that was foreign investment rather than solely domestic).
Exit pathways are therefore critical for those looking to invest. Whether through trade sales, secondary transactions, or IPOs, investors must assess whether an asset can realistically reach the market.
As things stand today, the capital is there, the time seems right. The question is: where’s the opportunity, and who will be responsible for executing these deals?
Where Capital May Be Deployed
It is likely that the UK mid-market will be where a significant portion of the dry powder is invested, as mid-market buyouts and add-on strategies continue to dominate investor pipelines. These transactions offer scalable growth potential with more manageable valuation risk, making them attractive for investment.
Some investors may also look at underperforming or stressed assets where refinancing or restructuring can create value, a trend we’ve seen in Italy (as outlined by A&O Shearman). There’s also significant opportunity for consolidation strategies as firms navigate supply chain volatility, providing potential add-on activity to shape deal flow.
This is where the right hire becomes critical: creative management teams and innovative deal structures can make the difference.
Hiring Demand
For investors, the quality of management is as vital as the quality of the asset. As 2026 unfolds and dry powder is deployed, M&A firms will be looking for individuals experienced in originating and executing deals.
From investment analysts to associates who source and assess opportunities, firms will seek talent capable of navigating fast-moving deals. Those with a proven track record will hold a strong advantage.
If you are considering your next move in M&A, transaction services, restructuring or private capital advisory, our team can offer a confidential view of the market and the opportunities likely to emerge as deployment activity develops. Upload your CV today, or browse our selection of corporate finance opportunities.
