February 5, 2026: Is the Liquidity Drought Over?

When interest rates rose in 2022, the financing behind leveraged private asset investments became much more expensive. This led to a slowdown in deal activity and exits across the market. In turn, fund distributions stopped flowing to private asset investors, which prevented them from redeploying that capital into new private asset opportunities. This liquidity drought has persisted in the private assets market for the past several years.

Fast forward to today, and it seems the drought may finally be coming to an end. Merger and acquisition (M&A) activity started off slow in 2025 due to economic and tariff uncertainty. In the second half of the year, however, as interest rates fell and investors regained confidence, M&A soared to record highs. PitchBook estimates over 50,000 deals totaling nearly $5 trillion were completed globally in 2025, surpassing the previous record in 2021.¹ Deal activity and exits in the private assets market followed suit. Global private equity exits were shy of their 2021 record but eclipsed $1 trillion for the first time since then.²

Despite persistent economic uncertainty, these trends are expected to continue into 2026. Private asset investors could see more distributions coming their way in the months ahead.

¹ PitchBook “2025 Annual Global M&A Report”
² PitchBook “2025 Annual Global PE First Look”

Weekly Market Update: February 5, 2026