Key Takeaways
- • Apollo's Bryn Gostin says private equity deal activity has rebounded in 2026 in deals executed and exits, with the market favoring larger transactions, but it is "not an exuberant market."
- • Gostin argues PE now requires deeper resourcing across the buy, build, and exit phases, as multiple expansion has fallen from nearly two-thirds of PE returns to less than 10% today.
- • Gostin says the earnings multiple spread between private and public equity is wider than ever, and that a regression of that delta combined with durable PE earnings growth could produce a period of material PE outperformance.
- • Gostin cites a 10-year return asymmetry: both public and private equity deliver roughly 18-20% annualized in good decades, while PE's bad decades have historically produced roughly 9-10% net returns versus zero or negative for public equities.
- • Gostin favors value-oriented, free-cash-flow-driven strategies with the ability to pivot to distressed investing late in the cycle, and sees drawdown structures as better suited to opportunistic buyouts than evergreen vehicles.
Summary
Apollo Global Management's Bryn Gostin, in a discussion with Diana Sands, said private equity activity has rebounded so far in 2026 in both deals executed and exits, though he characterized the market as far from exuberant. He noted that the market is favoring larger transactions, which he attributed to the asset class maturing and requiring deeper resourcing. That requirement spans the full ownership cycle: on the buy side, the 2026 deal cost index is relatively high, demanding more industry insight to avoid overpaying; on the build side, multiple expansion has fallen from nearly two-thirds of PE returns to under 10%, so value creation capabilities matter more; and on exit, sellers must pressure-test exit channels during underwriting and maintain discipline rather than waiting for the last dollar of incremental value.
On allocator sentiment, Gostin said institutional investors recognize the case for private equity but face internal challenges in persuading boards with less asset-class experience, particularly after three rolling years of strong S&P 500 returns. He described a backlog of allocations to work through. He framed the core value proposition as risk-adjusted returns over a full market cycle and diversification. He argued that the public market has roughly halved in company count and that concentration in a handful of names has increased, while private markets offer a wider aperture. He cited Russell 3000 data in which roughly 50 companies make up 60% of the index, contrasting this with private markets where the top 50 companies would be under 10% of the universe and no single exposure exceeds 1%.
On valuation, Gostin said deploying into the S&P 500 today amounts to top-ticking valuation momentum, and that the earnings multiple spread between private and public equity is the widest it has ever been. He added that PE earnings growth has been relatively durable. He addressed the timing question by emphasizing vintage year risk, which he called the largest single risk for allocators, and recommended consistent, methodical deployment over time. He noted that distributions have fallen from around 20% of NAV to nearer 10%, and that the current environment has produced zombie funds unable to raise capital, a dynamic he said preceded attractive returns after the financial crisis.
On macro conditions, Gostin said Apollo remains constructive on growth but sees late-cycle features, with rate-sensitive sectors such as autos, housing, and credit card spending under pressure while AI-driven hyperscalers remain strong. He recommended value-oriented strategies focused on free cash flow and operational value add, with the flexibility to move into distressed or dislocated opportunities. He cautioned against heavy deployment into high-growth, discount-rate-sensitive technology.
On structure, Gostin described drawdown funds as a roughly 10-year vehicle, with capital called over four to five years, a harvest period, and distributions toward the end, a model David Sambur, co-head of Apollo's private equity business, describes as the simplest strategy available. He contrasted this with evergreen or semi-liquid vehicles, which offer periodic subscriptions and redemptions, fully call capital upfront, and create a timing mismatch against 3-5 year asset holding periods. He said drawdown structures better suit opportunistic buyouts, while evergreens work well for private credit and secondary private equity strategies with consistent cash flows.
On allocator sentiment, Gostin said institutional investors recognize the case for private equity but face internal challenges in persuading boards with less asset-class experience, particularly after three rolling years of strong S&P 500 returns. He described a backlog of allocations to work through. He framed the core value proposition as risk-adjusted returns over a full market cycle and diversification. He argued that the public market has roughly halved in company count and that concentration in a handful of names has increased, while private markets offer a wider aperture. He cited Russell 3000 data in which roughly 50 companies make up 60% of the index, contrasting this with private markets where the top 50 companies would be under 10% of the universe and no single exposure exceeds 1%.
On valuation, Gostin said deploying into the S&P 500 today amounts to top-ticking valuation momentum, and that the earnings multiple spread between private and public equity is the widest it has ever been. He added that PE earnings growth has been relatively durable. He addressed the timing question by emphasizing vintage year risk, which he called the largest single risk for allocators, and recommended consistent, methodical deployment over time. He noted that distributions have fallen from around 20% of NAV to nearer 10%, and that the current environment has produced zombie funds unable to raise capital, a dynamic he said preceded attractive returns after the financial crisis.
On macro conditions, Gostin said Apollo remains constructive on growth but sees late-cycle features, with rate-sensitive sectors such as autos, housing, and credit card spending under pressure while AI-driven hyperscalers remain strong. He recommended value-oriented strategies focused on free cash flow and operational value add, with the flexibility to move into distressed or dislocated opportunities. He cautioned against heavy deployment into high-growth, discount-rate-sensitive technology.
On structure, Gostin described drawdown funds as a roughly 10-year vehicle, with capital called over four to five years, a harvest period, and distributions toward the end, a model David Sambur, co-head of Apollo's private equity business, describes as the simplest strategy available. He contrasted this with evergreen or semi-liquid vehicles, which offer periodic subscriptions and redemptions, fully call capital upfront, and create a timing mismatch against 3-5 year asset holding periods. He said drawdown structures better suit opportunistic buyouts, while evergreens work well for private credit and secondary private equity strategies with consistent cash flows.
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