In a stalled exit market, sponsors are consolidating their way out
European private equity add-ons have reached decade-high levels amid cautious sponsor activity, with 2,121 deals in the first half of 2026 representing 57.7% of total European PE transactions. PitchBook News spoke with Richard Damming, head of PE investments Europe at Schroders Capital, about the challenges and opportunities of a consolidated platform in a low-leverage market.
Damming highlighted that high financing costs are a significant hurdle, particularly in the lower mid-market where smaller transactions with lower valuations require less leverage. He noted that consolidating markets create value for larger buyers at exit, and that GPs are increasingly turning to alternative financing such as preferred equity and vendor loans.
AI adoption varies among European companies, with some advanced and others still in the early stages of implementation. Damming emphasized the importance of structured discussions among invested companies and their GPs to share best practices and accelerate AI adoption.
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