THE PRIVATE EQUITY VALUE REPORT 2026
Where partnership fuels performance
The Private Equity Value Report 2026, in association with BDO, analyses Ebitda compound annual growth rate of 245 private equity-backed companies across the UK.
Executive Summary
National Numbers
Top Tips
Southwest
Southeast
London
East of England
Midlands
Yorkshire
Northeast
Northwest
Wales
Scotland
Contacts
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The Private Equity Value Report 2026
The last few years have been anything but normal for UK private equity firms and their portfolio companies.
Businesses, dealmakers and management have had to navigate a relentless wave of events, ranging from inflation, higher interest rates, and rising energy costs to geopolitical conflicts, tariffs and tax increases.
Yet despite all these challenges and developments, private equity-backed portfolio companies have continued to innovate and grow. The 245 companies tracked in the data for this report represent real-life examples of buyout-backed businesses that are delivering exceptional financial performance in the most trying of circumstances.
Collectively, these companies have posted an average combined CAGR Ebitda of 62% between the 2022 and 2024 financial years.
This performance is a testament to the resilience of portfolio companies and their management teams, as well as the power of the private equity ownership model, and the direct alignment and clear decision-making it facilitates in times of volatility.
“Private equity is a resilient asset class. These firms have navigated multiple cycles and tend to provide stability and strategic support to portfolio companies during downturns,” says BDO tax partner and PE leadership team member, Catherine Jones.
We have interviewed a cohort of growing portfolio companies and their private equity backers to understand exactly what is happening on the ground to deliver the growth and profitability reflected in the headline findings of this research.
What has come through in these conversations with management teams and private equity dealmakers is that the asset class is constantly evolving its value creation toolbox in the face of changing market dynamics.
“Value creation is at the top of the agenda for private equity investors. Revenue growth is currently more moderate that previously seen,so the value creation has to be delivered in a more strategic way,” says Andrew Howson, BDO deal advisory partner in transaction services and UK head of private equity.
“There is a shift in focus in the industry from opportunistic improvement to structured value creation strategies that run throughout the life of the investment.”
One operational theme that recurs continually in the report, across all regions and sectors, is the value private equity can bring when it comes to AI implementation at the portfolio company level.
AI is going to drive meaningful productivity in business, but identifying company-specific use cases and ensuring that implementation delivers return on investment can be overwhelming for mid-market management teams.
Buyout firms that have worked on AI deployment with other portfolio companies and can draw on networks of tech experts and consultants are adding significant value for portfolio companies that are at the beginning of their AI journeys.
“Digital transformation and AI adoption are central to many value creation strategies. The best-performing investors are increasingly those who can translate digital strategy into measurable return on investment inside portfolio businesses,” says BDO partner and head of financial sponsor coverage, Sarah Ziegler.
Local networks still matter enormously. In a tougher market, relationships and proximity to management teams can be a real advantage in driving returns
In addition to sharpening the focus on operational execution and portfolio company AI capability, private equity managers are also leveraging M&A at the portfolio company level to drive growth, and deploying novel financing structures to find a way through market uncertainty.
“Buy-and-build strategies remain a highly effective way to drive scale and value. We also see increased use of more innovative funding structures, such as continuation vehicles, to steer through market cycles and liquidity navigation,” says BDO audit partner James Newman, who also sits on the firm’s PE leadership team.
Jones adds: “Where timelines extend, sponsors are becoming more creative about how they realise value. Managers have shown that they are adept at structuring continuation funds, making selective divestments and separating high-performing divisions to unlock value independently.”
These shifts in the private equity approach to portfolio management and value creation are also reframing the dealmaking and due diligence process.
“The fundamentals of dealmaking haven’t changed, but the tools have. Data cubes, deeper analytics, and more sophisticated due diligence are becoming standard. We are heading into an era where due diligence gets more specialised, and where cultural diligence and management diligence become more and more important,” Austin says.
In a tougher macro-economic environment buyside sponsors are scrutinising deal targets in forensic detail, and demanding more than optimistic growth stories and hockey-stick projections.
“Investment committees are more deliberate. Sponsors want to mitigate risk before committing capital,” Ziegler says. “Narrative alone is no longer enough. Sponsors want to see track records, evidence of delivery, and a management team that has proven it can execute.”
Private equity works because it incentivises small groups of highly motivated people to go through brick walls. It’s not perfect, but it’s a successful asset class
Sponsor expectations of advisers are also higher, with firms favouring advisory relationships that produce good quality introductions for new deals and solve problems at the portfolio level.
“Private equity firms value advisors who can navigate complex challenges and quickly mobilise the right specialists to drive outcomes, whether that is around transaction advice, financial management, value creation and the prevention of value leakage,” Ziegler says.
As sponsors have become more selective, the funnel of companies that meet exacting buy-side standards has inevitably narrowed. This has benefited regional markets outside of the dominant private equity centres in London and the South East.
There is growing interest in less mature and less heavily competed markets, and investors are looking beyond traditional hotspots and spending more time in regions that have been comparatively underexplored in order to keep pipelines for prospective deals topped up.
“London and the South East will always matter, but regions like Wales, the South West, Scotland, and the North East present high‑potential and exciting Ebitda growth opportunities,” Austin says.
Indeed, this report highlights the high-quality companies operating outside the capital and posting high Ebitda CAGRs for their sponsors.
For firms and advisers that have put resources into building regional office teams, this investment is now paying off.
In mid-market dealmaking, building connections with management teams remains one of the single most important predictors of transaction success, which makes strong local teams and regional advisory networks hugely valuable.
“Local networks still matter enormously. In a tougher market, relationships and proximity to management teams can be a real advantage in driving returns,” says Ziegler.
PE firms are also expanding the addressable market of deal targets by taking a nimbler approach to deal structuring.
“Private equity has largely prioritised majority investments and taking control positions. What we see now is a much broader approach to capital deployment,” Howson says. “Minority capital is a good way to put money to work, and to gain a foothold with companies reluctant to sell controlling stakes.”
Looking ahead to the rest of 2026 and beyond, the outlook for growth and macro-economic stability looks uncertain at best.
What UK mid-market private equity has evidenced through the last five years, however, is that it isn’t reliant on macro tailwinds to perform and succeed.
Portfolio companies have proven their ability to adapt to tough economic conditions and identify opportunities and pathways to profitability through cycles of volatility.
Buy-and-build strategies remain a highly effective way to drive scale and value. We also see increased use of more innovative funding structures, such as continuation vehicles
“Private equity is a fundamental part of the UK’s economic engine. Supporting entrepreneurial, private equity-backed businesses through growth, transformation and exit is a strategic focus that is embedded in how we work,” Newman says.
Challenges may lie ahead, but it is in times of uncertainty that UK mid-market private equity can truly stand out.
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