Uptick in IPOs bringing confidence and liquidity to global private equity markets
Confidence and liquidity appear to be returning to global private equity with early indications from 2026 pointing to a long overdue uptick in IPO activity supporting valuations, deal conditions, and contributing to more buoyant conditions for the private equity market.
This is the view of Adam Myers, Executive Director at Pengana Capital Group, which operates Australia’s only listed global PE vehicle, the Pengana Private Equity Trust (ASX: PE1). He said a functional capital markets environment supports exits and realisations, with impact across the global PE ecosystem. “The re-opening of capital markets, and the number of IPOs we are seeing is one of the strongest signals that confidence and liquidity is returning to PE.
“This allows capital to be recycled into new investments, with benefits at all levels of PE investment.
“For example, in mid-market PE most returns realisations are not driven by IPOs directly, but improving exit conditions should support realisations and allow capital to be redeployed into the next generation of investments.
“It improves distribution flows and it certainly supports confidence and valuations across the spectrum.”
Myers said deal activity was also being spurred by a narrowing of the ‘valuation gap’. “The valuation gap is starting to narrow, which means the difference between the expectations of buyers and sellers is closer than it was previously. This is driving a meaningful increase in deal activity.”
While PE1’s biggest position is in the world’s largest private company, SpaceX, and while it also has exposure to tech companies including OpenAI, Anthropic, and Groq, the majority of the portfolio targets relatively ‘boring’ and resilient mid-market companies, Myers said.
“PE’s middle market has shown performance advantages, with middle market buyout funds historically outperforming large-cap buyout strategies.
“There is less competition from other investors in the mid-market, and they often have lower entry multiples and less leverage. Mid-market companies also provide more exit options and hence more ways to deliver returns to investors – they can acquire another business, be acquired, be sold to a strategic sponsor, or pursue a public offering.
“The foundation of the PE1 portfolio consists of these cashflow generative, economically resilient, mid-market buyout businesses.
“But when there is an opportunity to take a meaningful position in a company like SpaceX we also have that flexibility to take it”, Myers said.
PE1’s annualised NAV return since its inception in 2019 to 31 December 2025 is 8.7%. Unusually for a private equity vehicle, PE1 pays an ongoing distribution yield of 4% p.a. on NAV.
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