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- $4.7B Exit. 91% Stable Portfolios. Europe Rotates to Quality.
$4.7B Exit. 91% Stable Portfolios. Europe Rotates to Quality.
Liquidity is showing up in U.S. power while portfolio stress remains surprisingly muted
Good morning, ! This week we're covering a $4.7B energy exit and $2.3B fundraise signaling liquidity in infrastructure-like assets, portfolio stress staying contained with 91% reporting ≤5% enforcement, and Europe’s 2026 deal map led by Tech (69%), Business Services (68%), and Infrastructure (67%).
We also ask: are GP-led continuation vehicles a value-creation tool—or a liquidity patch?
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REGIONAL FOCUS
Europe’s 2026 Deal Map
If 2025 was about caution, 2026 looks more selectively constructive—at least in the right sectors.
Survey data shows Technology, software & digital solutions (69%) leading expected PE deal growth, followed closely by Business services & logistics (68%) and Infrastructure (67%). In Europe especially, that reads like a playbook: digital enablement, asset-light platforms, and long-duration cash flows.
Pharma & healthcare (59%) remains durable but less dominant than prior cycles. Meanwhile, cyclicals—Automotive (14%) and Chemicals (14%)—sit firmly in the penalty box.
The message is clear: 2026 won’t be a volume rebound. It’ll be a quality rotation toward recurring revenue, infrastructure-linked assets, and defensible cash flow.
Sponsors that lean into structural growth—and avoid capital-intensive volatility—are likely to capture the bulk of renewed momentum. (More)
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DEAL OF THE WEEK
The Classic Value Creation Arc
Quantum Capital Group is doing what LPs have been politely asking for since 2022: liquidity. The Houston-based sponsor closed the $4.7 billion sale of Cogentrix Energy to Vistra Corp, while simultaneously locking in $2.3 billion toward Quantum Energy Partners IX, targeting $4.5B (hard cap: $5.75B).
Cogentrix’s portfolio? 10 gas-fired plants, ~5,500 MW across PJM, ISO-NE, and ERCOT. Translation: dispatchable capacity in a market suddenly obsessed with grid reliability and AI-driven power demand.
The playbook was textbook: buy scale, optimize operations, sell to a strategic buyer hungry for firm capacity.
With prior funds reportedly generating 2.0x+ over five years, Quantum is proving a point: in a tight exit market, infrastructure-like energy assets still clear. Private equity may be slow elsewhere. In U.S. power, it’s very much on. (More)
PRIVATE CREDIT
Stress, But Not Distress
The latest survey data offers a surprisingly calm read on asset enforcement activity.
A full 91% of respondents reported that 5% or less of their portfolios were subject to a creditor remedy over the past twelve months. Within that, 32% reported zero enforcement activity. Only 10% saw enforcement levels above 5%—and just 2% crossed the 25% mark.
Translation: pressure is real, but it’s not systemic.
Higher rates and tighter liquidity are forcing targeted workouts, not portfolio-wide restructurings. The dispersion also reinforces a familiar theme: underwriting discipline matters. Conservative leverage, tighter covenants, and strong sponsor alignment are separating resilient books from reactive ones.
For allocators, the takeaway is simple: this remains a late-cycle normalization, not an enforcement wave. We’re watching default migration, amendment creep, and recovery trends—but escalation hasn’t arrived. (More)
MICROSURVEY
How do you view GP-led continuation vehicles today? |
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TWEET OF THE WEEK
"You'll never do a whole lot unless you're brave enough to try."
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