Key Takeaways
- • European private equity fundraising remains under pressure in 2026, with first-half fundraising running below the same period in 2025, which itself was a decade-low year, according to Morningstar.
- • Weak investment returns and a drop in exit activity are restricting distributions, leaving less capital available for reinvestment into new funds.
- • Johann Scholtz, senior equity analyst at Morningstar, said private market managers must improve investment performance to restore fundraising momentum.
- • Lower deal valuations could improve prospects for newly launched funds, though managers that invested during the 2021-2022 valuation boom face difficult exits.
- • Morningstar named Partners Group as its preferred private market pick and Amundi as its preferred traditional asset manager, with Amundi and DWS leading a recovery in traditional manager fund flows.
Summary
European private equity fundraising remains under pressure, according to data provider Morningstar, driven by weak investment returns and a decline in exit activity. Fundraising in the first half of 2026 was running below the same period a year earlier, following a decade-low fundraising total in 2025.
The shortage of distributions is a central constraint. Limited capital being returned to investors reduces the funds available for reinvestment in new vehicles, which keeps pressure on fundraising. Johann Scholtz, senior equity analyst at Morningstar, said private market managers need to improve investment performance to restore fundraising momentum.
Morningstar notes that lower deal valuations could improve the outlook for newly launched private equity funds and support future returns and carried interest for managers. However, managers that invested during the valuation boom of 2021 and 2022 face greater difficulty achieving profitable exits.
Listed private market managers now trade at more attractive valuations, with their premium ratings narrowing. Traditional asset managers, by contrast, are seeing stronger momentum as fund flows recover alongside improving investment performance, with Amundi and DWS leading this recovery, according to the report.
Morningstar identified Partners Group as its preferred pick among private market managers and Amundi among traditional asset managers.
The shortage of distributions is a central constraint. Limited capital being returned to investors reduces the funds available for reinvestment in new vehicles, which keeps pressure on fundraising. Johann Scholtz, senior equity analyst at Morningstar, said private market managers need to improve investment performance to restore fundraising momentum.
Morningstar notes that lower deal valuations could improve the outlook for newly launched private equity funds and support future returns and carried interest for managers. However, managers that invested during the valuation boom of 2021 and 2022 face greater difficulty achieving profitable exits.
Listed private market managers now trade at more attractive valuations, with their premium ratings narrowing. Traditional asset managers, by contrast, are seeing stronger momentum as fund flows recover alongside improving investment performance, with Amundi and DWS leading this recovery, according to the report.
Morningstar identified Partners Group as its preferred pick among private market managers and Amundi among traditional asset managers.
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