The Swiss private capital market is experiencing a selective but resilient recovery in 2026, characterized by greater strategic intent and structural changes. While dealmaking is more selective, megadeals are re-emerging as sponsors focus on opportunities with strong strategic fit and operational upside. This shift has led to global private equity transaction values reaching almost $2 trillion in 2025, up from $1.6 trillion in 2024, despite a decrease in the number of deals. A few large transactions, often involving consortiums and complex financing, are accounting for a disproportionate share of the total deal values. Investors in Switzerland are particularly interested in sectors like healthcare, industrial technology, and business services, favoring companies with resilient earnings and strong cash conversion.
Despite signs of recovery, private equity firms are facing a squeeze due to challenging exit conditions. The global inventory of private equity-backed companies reached approximately 32,500 by the end of 2025, an increase from 29,400 a year prior, with many assets held beyond their targeted holding periods. This backlog is fueled by uneven IPO markets and selective buyer demand. Although public markets are showing early signs of recovery, exemplified by Medline's $7.2 billion IPO in 2025, IPOs remain a small fraction of exits. Secondary markets are expected to be the dominant exit route in 2026, alongside selective strategic sales, as they help general partners manage holding periods and unlock liquidity.
The Swiss M&A market, while stable, has become less seller-friendly in the past two to three years. This has resulted in a shift towards more balanced share purchase agreements, incorporating elements like purchase price adjustment mechanisms and earn-out provisions. Transaction processes are generally less competitive, and regulatory scrutiny, particularly in merger control, has increased, leading to longer review timelines. While Switzerland remains an attractive market due to its stable legal and political environment, global uncertainties, persistent valuation gaps, and selective lending are making it harder to close deals. However, a high level of "dry powder" (available capital) among PE investors and selling pressure on long-held portfolios create a dynamic where opportunistic transactions, especially with local champions and SMEs, can still yield attractive returns.
