PE buyers expect higher prices as holds stretch past 5 years

What's New

US private equity firms expect to keep paying more for assets while struggling to sell what they already own. BDO's 2026 Private Equity Survey polled 400 US PE leaders. Of those, 82% expect deal prices to rise over the next year. Hold periods are moving in the same direction. Holds of 5 years or more now describe 80% of respondents. The prior survey put that share at 63%. Buyers underwriting new platforms at today's prices should plan for a longer hold than their models assume.

Why It Matters

LPs waiting on distributions are on the wrong side of this finding. BDO says managers are keeping assets bought at high valuations with heavy leverage because selling now means accepting a lower return. Higher entry prices push the same problem onto the next vintage. The finding challenges the view that rising deal prices signal a healthy recovery. BDO ties them to too much dry powder chasing too few quality assets.

By The Numbers

• 29% name competition from other buyers as their top challenge in deploying capital, the most common answer.

• 41% prefer private credit to finance acquisitions, more than any other source.

• 23% report average holds of 7 to 8 years. The prior survey put that group at 15%.

• 30 years is how far back Jason Frank, president of BDO Capital Advisors, reaches for a deal market this competitive. He calls it the strongest seller's market he has seen.

Reality Check

The survey measures intentions. BDO's own commentary shows how far intentions can drift from activity. Add-on acquisitions rose 9 percentage points as a planned use of dry powder. Actual add-on volume is down from the prior year.

AI follows the same pattern. Of respondents, 94% say AI is reshaping their investment thesis now or will soon. Only 8% say it already has.

Expectations also rise with fund size. Among respondents at funds of $20 billion or more, most expect double-digit price gains. The share is 55%.

The source has a stake in the result. BDO Capital Advisors advises on the M&A these respondents plan to do. A strong seller's market is good news for an M&A adviser.

The Wrap

Private equity is paying higher entry prices while its exit channel stays narrow. Rising prices can still earn their return where add-ons, pricing and AI lift earnings faster than multiples expand. They turn into longer holds where exits stay slow and rates stay higher for longer. Take-private deals offer larger funds a partial release. Of respondents, 88% expect them to grow more attractive. Exit data over the coming year will show which path the maturing vintage takes.