Private Equity’s $1 Trillion Comeback Raises The Talent Stakes

U.S. private equity roared back last year, surpassing $1 trillion in deal value for only the second time in the asset class’s history. But beneath the resurgence in transactions, exits, and megadeals, a more structural challenge is taking shape – one that puts leadership quality and workforce readiness at the center of value creation. Evan Berta, an associate at Hunt Scanlon Ventures, examines PitchBook’s latest findings and what it means for executive search, portfolio leadership, and human capital strategy.

According to PitchBook, U.S. PE deal activity last year reached just over 9,000 transactions totaling $1.16 trillion, marking a decisive rebound after a volatile first half of the year. While macro uncertainty briefly slowed activity in Q2, improved financing conditions, rate cuts, and renewed risk appetite fueled a strong second-half recovery.

For talent leaders, this resurgence is not just about deal volume. It signals a return to complex integrations, accelerated growth plans, and higher expectations for execution across PE-backed companies.

“Whenever deal activity accelerates this sharply, the first constraint sponsors feel is leadership,” said Evan Berta, an associate at Hunt Scanlon Ventures. “Capital can move quickly. Talent rarely does.”

Megadeals Raise the Bar for Leadership Execution

PitchBook notes that 150 megadeals ($1B+) accounted for more than $567 billion in value, eclipsing even the 2021 peak in aggregate megadeal value.

These transactions concentrate scale, complexity, and scrutiny, placing extraordinary pressure on executive teams to integrate systems, manage debt, and deliver rapid value creation.

“Whenever deal activity accelerates, the first constraint sponsors feel is leadership. Capital can move quickly. Talent rarely does.”

For executive search firms, CHROs, heads of talent and operating partners this environment favors repeat operators: CEOs, CFOs, and COOs who have navigated scaled platforms before. Sponsors are less willing to “grow into” leadership roles during periods of heightened leverage and public-market comparables.

“Megadeals compress the learning curve,” notes Mr. Berta. “Sponsors want leaders who have pattern recognition, not first-time experience.”

Exit Markets Reopen and Leadership Becomes Critical

Exit activity rebounded meaningfully in 2025, with 1,619 exits totaling $728 billion, up more than 90 percent year-over-year by value. Yet PitchBook’s data shows exits remain uneven, driven disproportionately by large, high-quality assets.

This dynamic has implications for portfolio leadership. As holding periods stretch – median holding times remain above pre-pandemic norms – executives are being asked to sustain performance longer, often through multiple market cycles.

“Extended holds change how sponsors think about talent,” said Mr. Berta. “Leadership stamina, adaptability, and succession depth are now just as important as near-term growth.”

As a result, search activity is increasingly focused on backfilling and upgrading leadership benches mid-hold, rather than only at entry or exit.

Fundraising Pressure Reshapes Talent Demand

Despite the deal rebound, fundraising declined to $278 billion across 327 funds, making 2025 the weakest year for PE capital formation since 2020. LPs concentrated capital among established managers, leaving emerging and mid-market funds under pressure.

“Extended holds change how sponsors think about talent. Leadership stamina, adaptability, and succession depth are now just as important as near-term growth.”

This bifurcation is reshaping talent strategy across the ecosystem. Larger platforms are building centralized operating teams, shared leadership playbooks, and repeatable talent models. Smaller funds, by contrast, are seeking leaders with immediate sector expertise and hands-on operating capability.

“For human capital leaders, this is a split market,” Mr. Berta says. “Scale favors systems and depth. Smaller funds need executives who can execute without infrastructure.”

Technology and Healthcare Drive Talent Demand

PitchBook highlights technology and healthcare as standout sectors in 2025. Tech PE deal value surged to $310 billion, while healthcare transactions exceeded $138 billion, driven by megadeals and continued interest in software, data, and mission-critical platforms.

These sectors are also the most competitive for talent. Demand for executives who can lead AI-enabled platforms, manage regulatory complexity, and scale recurring-revenue businesses is intensifying.

“Sector momentum always pulls talent,” said Mr. Berta. “The challenge now is that the same leaders are being chased by corporates, PE sponsors, and venture-backed platforms at the same time.”

What Talent Leaders Should Watch in 2026

PitchBook’s data suggests that 2026 will remain active but disciplined. Credit conditions are improving, exits are reopening, and dry powder remains substantial. At the same time, aging portfolios, fundraising concentration, and higher leverage are raising the bar for execution.

For executive search firms, CHROs, heads of talent and operating partners, leadership decisions are becoming inseparable from investment outcomes. Succession planning is moving earlier in the hold period, leadership upgrades are happening mid-cycle, and sponsors are placing greater weight on executives who can perform through prolonged uncertainty.

“Private equity’s rebound is real,” says Mr. Berta. “But the firms that outperform in 2026 will be the ones that treat leadership and talent strategy as core value drivers, not downstream considerations.”