Private equity firms are facing a market downturn more severe than that experienced during the 2008 financial crisis, according to a recent report by Bain & Company. The analysis, detailed in multiple reports this month, points to a prolonged slump in dealmaking and exits, exacerbated by rising interest rates and economic uncertainty.
The current difficulties stem, in part, from the inability of firms to successfully sell portfolio companies. This logjam is preventing the recycling of capital and hindering new investments. The Financial Times reported that the private equity market is experiencing a record struggle to offload assets.
Adding to the pressure, the re-election of Donald Trump and his renewed focus on tariffs are significantly impacting the private equity landscape. According to reports from The Telegraph and Bitget, Trump’s trade policies are triggering the worst performance for private equity since 2008. The uncertainty surrounding potential tariff increases is making it more difficult to assess the value of companies and complete transactions.
Bain’s assessment indicates that the challenges facing the industry are not temporary. The firm predicts a prolonged period of difficulty, surpassing the severity and duration of the 2008 subprime mortgage crisis, as reported by วารสารการเงินธนาคาร. This downturn is characterized by a scarcity of available capital and a widening gap between buyer and seller expectations.
While some anticipate a potential rebound driven by falling interest rates and accumulated “dry powder” – uninvested capital – the prevailing conditions suggest a more cautious outlook. The increasing difficulty in securing favorable “deal math” is further complicating the situation, with a shift occurring where a multiple of 12 times earnings is becoming the new benchmark, replacing the previous standard of 5 times, according to Private Equity News.
As of February 23, 2026, no official statement has been released by the White House regarding potential adjustments to existing tariff policies, leaving private equity firms to navigate a period of sustained uncertainty.
