The share of global tech buyout deals held by private equity firms dropped from 34% in 2023 to 11% in early 2026. Despite this decline, limited partners continue to commit capital to existing buyout managers.
Performance data shows that venture funds outperformed buyout funds over the last decade, with annual returns of 17.6% compared to 14.5% for US buyout funds. In the first half of 2026, venture funds marked up tech holdings by 16%, while buyout funds marked theirs down by 4%.
Leverage remains a significant factor in buyout strategies. Companies backed by private equity between 2019 and 2025 maintained net debt levels between 4.7x and 6.0x adjusted EBITDA, significantly higher than the 2x median for S&P 500 companies.
Fundraising for buyout firms decreased by 16% in 2025, totaling $395 billion, with weak activity continuing through mid-2026. The current AI-driven market environment appears to favor the venture capital model over the debt-heavy approach of traditional private equity.
