PE firms squeezed as Swiss M&A rebounds
TOP STORY: Swiss M&A activity has rebounded sharply this year, but private equity firms are capturing a smaller share of transactions as cash-rich corporate buyers become more aggressive in the market, according to a report by Bloomberg.
Swiss M&A activity has surged this year, but private equity firms are now playing a smaller role in transactions, according to a report by Bloomberg. Deal value in Switzerland rose to around $44bn in the first eight months of 2026, up about 20% year-on-year and slightly above the country's eight-year average, according to Boston Consulting Group. The recovery is part of a global M&A revival, with companies leveraging stronger balance sheets and improved earnings despite geopolitical and energy market uncertainty.
However, private equity's share of Swiss transactions fell to just about $8bn during the period, making it the second-lowest annualized level in the past eight years. This decline is attributed to increased competition from strategic corporate buyers and pressure on private equity managers to distribute returns to investors before raising new capital.
The biggest Swiss transactions of the year were led by corporations. Zurich Insurance Group acquired UK insurer Beazley for $10.9bn, while ABB bought UK automation firm Rotork for $5.6bn. Private equity contributed $8bn, including CVC Capital Partners' $2.6bn purchase of DSM-Firmenich's animal nutrition and health business and Lone Star's deal for part of chemicals group Lonza.
Private equity's relatively low share is a Swiss-specific phenomenon, with private equity continuing to account for a high proportion of deal activity in other markets, according to Jeremy Merz, a BCG partner and managing director. Strategic buyers currently have an advantage due to stronger liquidity and lower financing costs, making it harder for private equity firms to compete directly. However, Merz suggests the current dynamic might be temporary.
Private equity managers face challenges beyond winning new acquisitions. With exits remaining difficult and holding periods lengthening, managers are turning to alternative methods to generate distributions for investors, such as dividend recapitalizations, net asset value financing, and continuation vehicles. KKR co-CEO Scott Nuttall expects the continuation fund market to remain active, highlighting the growing importance of GP-led transactions as sponsors seek ways to provide liquidity to existing investors while retaining exposure to assets with further value-creation potential.
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