The $51.7B Land Grab + PE’s Exit Problem Solved?

Good morning, ! This week we're covering the rise of continuation vehicles as private equity’s new exit playbook, the land grab for wealth management distribution, tightening regulatory pressure on fees and governance, and why sector selection is defining liquidity in 2026. 

Sponsor Spotlight: Exact Insight provides data quality as a service for private equity teams. Through invitation-only panels of vetted B2B professionals, the platform delivers precision insights built for diligence. AI-powered and human-verified, Exact Insight is designed to reduce unreliable data and strengthen confidence in the inputs behind high-stakes decisions. Learn More

DATA DIVE

Continuation Vehicles: Private Equity’s New Exit Architecture

Continuation vehicles have moved from niche workaround to core private equity infrastructure. Continuation fund related exits rose from 44 in 2021 to 147 in 2025, while their share of global sponsor backed exit volume increased from 5% in 2020 to 13% in 2024. That kind of growth usually signals structural necessity, not temporary fashion.

The reason is simple. Traditional exits became harder. IPO markets stalled, strategic buyers grew selective, and valuation gaps slowed sponsor to sponsor transactions. Continuation vehicles gave GPs another path: deliver liquidity to LPs, retain ownership of top assets, and reset the hold period without selling too early. But LP support still comes with limits. 58% of investors would only roll less than 10% of their portfolio into these structures, showing enthusiasm remains measured.

Bottom line: Continuation vehicles are now part of the mainstream exit toolkit, but future growth depends less on demand and more on trust. Managers who solve for alignment, valuation discipline, and governance will capture the market. Those who treat these deals as financial engineering will struggle.

Read the full Report HERE

TREND TO WATCH

Buying the Client, Not the Product

Private equity has found its next obsession—and it’s not another asset class. It’s distribution.

Wealth management deal value hit $51.7B in 2025, with 610 deals, both all-time highs. The signal is clear: firms aren’t just chasing AUM—they’re chasing who controls the client relationship.

What’s driving it? A perfect storm: the Great Wealth Transfer, rising demand for alternatives, and a still-fragmented RIA market ripe for consolidation.

Deals like Carlyle’s stake in MAI Capital Management ($67B AUM) underscore the shift. This isn’t about ownership—it’s about owning the channel.

Bottom line: Private equity isn’t moving downstream—it’s planting a flag at the point of distribution. (More)

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Private equity teams do not struggle to find information. They struggle to trust it.

When a deal is live, weak respondent quality can create false confidence, wasted diligence cycles, and more work for teams already moving at speed. Traditional expert networks can help firms access conversations, but access alone does not guarantee quality, repeatability, or decision-ready research. By contrast, Exact Insight is built around 95%+ qualification rates, helping firms start with stronger inputs from the beginning.

That matters even more when timelines are compressed and teams are expected to move from initial diligence to sharper thesis validation without slowing down. If the inputs are inconsistent or difficult to verify, speed quickly becomes a liability rather than an advantage.

That is why more firms are raising the bar on the data behind their diligence. Better decisions start with better inputs.

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COMPLIANCE CORNER

Fees, Fiefdoms, and the Taxman

Private equity’s favorite game — moving fees, expenses, and influence around the org chart — is getting a tougher referee crew in 2025.

First up: the IRS. New Section 892 final regulations, effective December 15, 2025, narrow the ability of foreign sovereign investors to treat certain management fee income as passive and tax-exempt. Translation: if your structure relied on creative labeling and optimistic interpretations, now is the time for a refresh.

Then comes California, where new healthcare laws (SB 351 and AB 1415) effective January 1, 2026, restrict PE-backed management entities from steering clinical, billing, or operational decisions. Contracts that overreach may be voided, with the Attorney General holding the whistle.

Why it matters: One regulator wants proper tax allocation. Another wants proper operational separation. Both dislike cleverness dressed as compliance.

Bottom line: Review fee waivers, expense allocations, investor structures, and healthcare governance documents now. In this market, yesterday’s workaround can become tomorrow’s enforcement memo. (More)

LIQUIDITY CORNER

Exit Windows Are Opening, But Only in the Right Zip Codes

Private equity liquidity in 2026 may come down to one word: sector selection. New data from S&P Global shows exit activity is heavily concentrated in a few industries, with Information Technology leading by a wide margin at 198 projected exits, followed by Industrials at 123 and Healthcare at 87. After that, the numbers fall quickly. Consumer discretionary posts 57, consumer staples 54, while most remaining sectors sit well below 50.

The message is clear. Not all portfolio companies will face the same exit market. Tech continues to benefit from strategic demand, recurring revenue models, and buyer confidence around AI enabled growth. Industrials remain attractive due to reshoring themes, infrastructure tailwinds, and operational improvement opportunities. Healthcare keeps its premium because demographic demand rarely waits for macro conditions to improve.

Meanwhile, sectors such as Energy (8), Utilities (5), and Real Estate (4) appear far less liquid, suggesting sponsors may face longer hold periods or more creative monetization routes.

Bottom line: In 2026, liquidity will not be evenly distributed. GPs with assets in favored sectors may finally clear backlogs, while others may need continuation vehicles, structured exits, or patience. Sector exposure could matter more than timing. (More)

MACROVIEW

The Highest-Return Infrastructure Asset? Education.

Private equity loves hard assets—power, logistics, data centers. But the chart suggests the most durable growth asset may be human capital. Becker’s human capital model treats education as investment, not consumption: more schooling raises productivity, which lifts wages, output, and long-run growth.

Across a sample of 166 countries, stronger education outcomes are closely tied to higher GDP per capita, with a 0.74 correlation and R² of 0.55. In plain English: education explains a meaningful share of why some economies are richer than others.

The names at the top are telling: Singapore, Luxembourg, Ireland, Switzerland, Norway. Different geographies, same formula—skilled labor forces that attract investment, adopt technology faster, and drive productivity.

For investors, three implications stand out.

First, talent density matters. Countries producing stronger workers often produce stronger companies. Second, AI may widen the divide. Economies that can retrain labor and deploy technical talent should capture outsized gains. Third, cheap labor alone is fading as an edge. Future winners likely combine demographics with rising education quality. The old macro lens focused on rates, commodities, and cycles. Increasingly, smart capital may need to watch something simpler: the classroom pipeline. (More)

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Peter Drucker