Key Takeaways
- • H.I.G. Capital CEO Brian Schwartz told Bloomberg Deals on October 21, 2026, that private equity may be nearing a turning point in the prolonged slowdown in exits, driven by debt maturities and limited partner demands for distributions.
- • H.I.G. Capital reported approximately $6 billion returned to investors through 15 exits over the preceding 12 months.
- • Schwartz cited a backlog of roughly 33,000 private equity-owned companies and average industry holding periods of about seven years, while H.I.G.'s own average holding period is approximately 5.3 years.
- • H.I.G. reports approximately $75 billion in capital under management across private equity, credit, and real assets strategies.
- • Schwartz said the pressures could gradually raise transaction volumes but did not predict an immediate surge in dealmaking.
Summary
Private equity firms may be approaching a turning point in a long-running slowdown in asset sales, as mounting debt maturities and investor demands for liquidity increase pressure on fund managers to complete transactions. That was the view offered by Brian Schwartz, CEO of H.I.G. Capital, during an October 21, 2026, appearance on Bloomberg Deals, where he spoke with Bloomberg's Dani Burger about challenges facing middle-market private equity firms and the growing backlog of portfolio companies awaiting exits.
Schwartz pointed to two principal drivers that could bring more PE-backed businesses to market. The first is approaching debt maturities, which could force sponsors to choose between contributing additional equity to support refinancing and relinquishing control to lenders, either of which could increase restructuring or transaction activity. The second is limited partners' growing desire for distributions. Schwartz referred to a backlog of approximately 33,000 PE-owned companies and estimated average industry holding periods had extended to roughly seven years. Separately, reporting citing PitchBook put the global inventory at 33,575 companies as of June 30, 2026, a figure covering private equity more broadly rather than middle-market firms. As assets remain unsold longer, investors may focus more on distributions to paid-in capital (DPI) rather than reported returns. Schwartz summarized the point simply: "The second more practical piece is investors want their money back."
H.I.G. Capital, which reports approximately $75 billion in capital under management across private equity, credit, and real assets, described its experience as comparatively favorable. Schwartz said the firm returned about $6 billion through 15 exits in the last 12 months and reported an average holding period of approximately 5.3 years, longer than its historical experience but below the industry estimate he cited. He described an approach that targets complex businesses whose acquisition prices reflect operational challenges, with operating partners working to improve performance and generate value from fundamentals rather than market valuation changes. The amount returned, he noted, does not by itself establish investment profit or relative performance.
An eventual increase in exits could create opportunities for buyers with capital and operating resources to acquire fundamentally sound companies constrained by capital structures. However, refinancing pressure can also lead to lower sale valuations, losses for existing investors, or transfers of control to lenders. Schwartz's assessment reflects a market where the timing of recovery remains uncertain, and he framed the interview as outlining pressures that could gradually move private equity toward higher transaction volumes rather than predicting an immediate surge.
Schwartz pointed to two principal drivers that could bring more PE-backed businesses to market. The first is approaching debt maturities, which could force sponsors to choose between contributing additional equity to support refinancing and relinquishing control to lenders, either of which could increase restructuring or transaction activity. The second is limited partners' growing desire for distributions. Schwartz referred to a backlog of approximately 33,000 PE-owned companies and estimated average industry holding periods had extended to roughly seven years. Separately, reporting citing PitchBook put the global inventory at 33,575 companies as of June 30, 2026, a figure covering private equity more broadly rather than middle-market firms. As assets remain unsold longer, investors may focus more on distributions to paid-in capital (DPI) rather than reported returns. Schwartz summarized the point simply: "The second more practical piece is investors want their money back."
H.I.G. Capital, which reports approximately $75 billion in capital under management across private equity, credit, and real assets, described its experience as comparatively favorable. Schwartz said the firm returned about $6 billion through 15 exits in the last 12 months and reported an average holding period of approximately 5.3 years, longer than its historical experience but below the industry estimate he cited. He described an approach that targets complex businesses whose acquisition prices reflect operational challenges, with operating partners working to improve performance and generate value from fundamentals rather than market valuation changes. The amount returned, he noted, does not by itself establish investment profit or relative performance.
An eventual increase in exits could create opportunities for buyers with capital and operating resources to acquire fundamentally sound companies constrained by capital structures. However, refinancing pressure can also lead to lower sale valuations, losses for existing investors, or transfers of control to lenders. Schwartz's assessment reflects a market where the timing of recovery remains uncertain, and he framed the interview as outlining pressures that could gradually move private equity toward higher transaction volumes rather than predicting an immediate surge.
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