Private Equity Abroad: Unlocking International Value

Private equity is no longer confined to domestic shores; it is a global force reshaping markets and unlocking value across continents.

Driven by macroeconomic stabilization and geopolitical shifts, this expansion offers agile capital for growth in diverse regions.

Investors are seizing opportunities abroad, from Europe's mature markets to emerging economies, fostering innovation and resilience.

The Global Surge of Private Equity

The landscape of private equity is evolving rapidly, with firms looking beyond traditional boundaries.

Expansion and shift from public markets highlight how companies stay private longer, reducing reliance on stock exchanges.

This trend fuels demand for private capital, supported by increasing allocations from pensions, insurance, and sovereign wealth funds.

Fundraising has remained stable despite challenges, with improving exits and secondaries boom enhancing liquidity.

Democratization is broadening access through semi-liquid funds, attracting retail and wealth investors worldwide.

Key trends shaping this global movement include:

• Steady growth in private markets despite economic uncertainties.
• Rising deal activity, with M&A rebounding in late 2025.
• Secondaries markets projected to exceed $200 billion by 2026.
• Broadening opportunities in regions and asset classes.
• Weakening USD boosting emerging market investments.

These factors collectively drive a more interconnected and dynamic private equity ecosystem.

Mapping Value: Regional Hotspots and Data Insights

Different regions offer unique advantages for private equity investors seeking international value.

Europe, for instance, leads in private debt and credit, with robust deal volumes and sector diversity.

Emerging markets present opportunities in infrastructure and energy transition, fueled by global megatrends.

The table below summarizes key regional insights and projections for 2026:

Carve-outs are a significant value play, driven by corporate divestments from trends like energy transition and AI.

Niche sectors like sports and independent funds also attract strategic investments, adding diversity to portfolios.

Regional focus points include:

• Europe's dominance in private debt with over 400 deals in H1 2025.
• Emerging markets benefiting from digital infrastructure and demographic shifts.
• Global infrastructure investments hitting a three-year high, indicating strong momentum.

This geographic diversity allows investors to mitigate risks and capitalize on local growth stories.

Unlocking Value: Strategic Approaches and Sectors

To harness international opportunities, private equity firms deploy a range of strategies tailored to specific sectors.

Private credit diversification and sector-specific bets are central to value creation in abroad markets.

Key sectors offering high potential include infrastructure, real estate, and specialized finance areas.

Strategic approaches that unlock value include:

• Carve-outs from large corporations, leveraging complex but attractive deals.
• Secondaries and continuation vehicles for liquidity management.
• Private credit expansion into asset-based finance like litigation funding.
• Investments in energy transition and digital assets driven by technological evolution.
• Focus on multi-family and industrial real estate, avoiding overexposed office spaces.

Private credit has seen exponential growth, with the US market doubling to $1.3 trillion since 2019.

This sector expands into opportunistic and distressed opportunities, blurring lines with traditional banking.

Infrastructure investments are broadening to include digital, defense, and transport, offering stable returns.

Specialized strategies in AI, tech restructurings, and professional sports add innovative angles to portfolios.

These approaches ensure that demand for agile capital in emerging regions is met with precision and foresight.

Navigating Headwinds: Challenges in the International Arena

While opportunities abound, private equity abroad faces significant challenges that require careful navigation.

High valuations can hinder deployment, and liquidity pressures from past vintages pose risks.

Geopolitical uncertainties, such as trade policy shifts and inflation, add layers of complexity to cross-border deals.

Key challenges and risks include:

• Elevated valuations limiting attractive investment opportunities.
• DPI and liquidity pressure from funds raised in 2020-2022.
• Tariff uncertainties and regulatory hurdles in cross-border M&A.
• Muted exit environments until late 2025, relying on bridges like dividend recaps.
• Stubborn inflation and K-shaped economic recovery affecting market stability.

Regulatory focus on investor protections, especially with democratization, necessitates transparency and compliance.

Mitigation strategies involve diversifying portfolios, leveraging secondaries for exits, and staying agile to macro changes.

By addressing these headwinds, firms can unlock international value amid steady fundraising and improve resilience.

The 2026 Horizon: Projections and Pathways

Looking ahead, the outlook for private equity abroad is optimistic, with data-driven projections pointing to growth.

Functional exits and improved capital recycling are expected to enhance deployment and returns.

Policy clarity and economic stabilization will likely boost transaction volumes across regions.

Preferred plays for 2026 include secondaries, asset-based finance, and infrastructure investments in digital and decarbonization.

Emerging markets will benefit from a weakening USD, offering compelling debt and equity opportunities.

Key projections and opportunities for unlocking value include:

• M&A activity accelerating with sponsor-led deals gaining traction.
• Fundraising strengthening as LP confidence grows with better exit environments.
• Opportunities from compelled sellers due to capital stress in various sectors.
• Under-owned industrials and public market gaps providing niche investment avenues.
• Private equity acting as a growth financier in regions with limited traditional banking access.

LP views highlight dynamic deal-making, though fundraising challenges persist, reshaped by retail demand.

Small and mid-market focus will remain crucial for targeting undervalued assets and driving value.

By embracing these pathways, investors can harness broadening opportunities and steepening yield curves for sustained success.

The journey of private equity abroad is one of transformation, where strategic vision meets global execution.

As markets evolve, those who adapt and innovate will unlock unprecedented value, shaping the future of finance.