Private Capital
2026 Outlook
Insights from the Termgrid community on the themes shaping private markets — from sentiment and deal terms to the race for technology-driven efficiency.
Who We Heard From
Respondents were geographically balanced, spanning the full spectrum of private capital market participants — from sponsors and lenders to private credit funds, advisors, and other deal participants.
Respondents were well-represented across both EMEA and the Americas, providing cross-regional perspective on the findings.
The survey results reveal a market defined not by pessimism, but by uncertainty, resilience in the lower mid-market, and a decisive shift toward technology-driven efficiency.
Market Outlook
Neutrality replaces optimism. Sentiment has softened across the board — but the data reveals important nuances by segment, market size, and geography.
General Outlook for Private Markets
of respondents working with firms below $50mn EBITDA report a positive outlook
The lower mid-market shows relative insulation from heightened competition, interest rate sensitivity, and broader macroeconomic pressures.
Fundraising Environment: Challenging, but Stabilising
Private credit funds are considerably more positive than sponsors on the fundraising environment, with 42% reporting an improved outlook.
Spread Expectations: Flat to Tighter
A clear majority expect stable or compressing spreads over the next six months.
By participant type and firm size advised
Deal Dynamics
Race-to-the-bottom risks in documentation and rising Liability Management Exercises signal a more complex deal environment heading into 2026.
“Race to the Bottom” on Terms
Respondents report that Europe’s fragmented loan market has historically accommodated diverse documentation practices. That tolerance is being tested — European markets see greater risk than the Americas.
Relatively Unconcerned
Lower mid-market shows continued confidence in disciplined pricing.
This segment’s insulation from the race to the bottom reflects structural differences in lender concentration and deal complexity at smaller market sizes.
Liability Management Exercises (LMEs)
A majority of respondents expect LME usage to increase over the next 12 months — with notable divergence between regions.
More than half of Americas respondents expect a rise in LME activity
Notably lower than Americas, reflecting different market structures
Technology Adoption
Efficiency gains are the primary driver of technology adoption in private capital. Early movers are already realising material benefits — but implementation challenges remain widespread.
Where Technology Can Have the Greatest Impact
Tracking Deal Terms: Moving Beyond Excel
Early adopters are increasingly moving away from Excel toward purpose-built systems, driven by the need for data integrity, scalability, and real-time visibility. As deal volumes and complexity increase, spreadsheet-based workflows are proving less sustainable.
Barriers to Adoption & Realised Benefits
Key Takeaways
Six findings that define how private capital is navigating change — and preparing for what’s next.
Market sentiment has softened, but uncertainty — not pessimism — dominates. Optimism has declined since mid-year, but outright negativity has also eased, pointing to a market in a holding pattern rather than distress.
The lower mid-market remains comparatively resilient. Firms below $50mn EBITDA show stronger positive sentiment, relative insulation from macroeconomic pressures, and greater confidence in deal discipline.
Fundraising is stabilising, with private credit more positive than sponsors. While conditions remain challenging, early signs of improvement are emerging — particularly in Europe and among private credit funds (42% reporting an improved outlook).
Most expect spreads to remain flat or tighten (73%), though pressure persists at smaller deal sizes. Respondents working with the smallest firms expect wider spreads at notably higher rates than the broader market.
LMEs are expected to increase, particularly in the Americas (55% vs. 41% in EMEA). Sponsors and advisors hold the strongest conviction on this trend, with implications for credit documentation and lender-borrower dynamics.
Technology adoption is accelerating, driven primarily by efficiency gains. Early adopters are moving beyond Excel to purpose-built platforms, with VDRs and online NDAs delivering the largest measurable improvements to deal workflows.
About Termgrid
Termgrid is the market-leading software platform purpose-built for private capital markets. Trusted by over 1,600 institutions and 30,000 users, Termgrid streamlines the end-to-end financing workflow, delivering efficiency and insight at every stage of a transaction.
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