PE competition for quality assets intensifies as 82% expect deal prices to rise

Private equity firms are experiencing heightened competition for high-quality assets, with 82% of US fund managers anticipating rising deal prices in the coming year, according to a BDO survey of 400 US private equity professionals. The challenge stems from a scarcity of quality assets relative to available capital and an increasing reliance on artificial intelligence in investment strategies.

Eighty percent of respondents have portfolio companies with holding periods of five years or more, seeking to generate returns in a challenging exit environment. AI is transforming investment theses for 94% of responders, influencing decision-making from target identification to portfolio management and exit planning. Private equity firms are now approaching sellers with comprehensive growth plans, enabling them to compete beyond price in crowded auctions.

Private credit remains a significant financing source, with 41% of respondents relying on private lenders as their main funding method. Talent acquisition and retention pose a significant challenge, cited by nearly half of respondents as the main obstacle to executing deals efficiently. Looking ahead, 87% of respondents believe IPOs will become more attractive, driven by large companies preparing to go public.

Additionally, take-private transactions are gaining favor, especially among larger funds, potentially offering an alternative to highly competitive private-to-private auctions. BDO's Private Equity National Leader, Patrick Donoghue, advises firms that adapt proactively, by creating new growth platforms, executing add-on acquisitions, and investing in talent and value creation, to better navigate the evolving market landscape. The survey was conducted in May 2026 by Rabin Roberts Research.