Introduction
In the first half of 2026, while PitchBook's US count of private equity deal value fell 10.6% year on year, three large sponsor markets outside the US held up or grew. On RECOFDATA's count, sponsor deal value in Japanese targets rose about 1.4-fold to ¥4.4 trillion, carried by take-privates that governance reform keeps supplying. PitchBook's European deal value rose 6.9% in the second quarter as sponsors sought Europe's lower entry multiples. Gulf sovereign wealth funds deployed a record $53.9 billion on Global SWF's count, state capital with no fund term that kept joining large deals. The readings come from different surveys, currencies and definitions, so they cannot be added or ranked. What they share is independence from the US cycle, so each region needs its own figures, drivers and reading of the mandates it produces.
Japan: Governance Reform and the Take-Private Pipeline
Japan's deal flow is supplied by corporate restructuring more than by the credit cycle. The Tokyo Stock Exchange's push on cost of capital and the unwinding of cross-shareholdings, traced in the governance reforms behind Japan's take-private boom, keep listed groups selling units and taking subsidiaries private. Beyond the ¥4.8 trillion of 2025 deal value set out in the cross-survey market dashboard, Bain's Japan private equity report records a record ¥2.4 trillion of exit value, so the market now returns cash too.
Returns explain the crowd: Bain puts the median Japanese deal at a 31% internal rate of return (IRR) and a 2.5x total value multiple, against 22% and 2.1x in the US. The cost is price. Take-privates announced in 2025 frequently carried take-private premiums of 60% to 80%, and Bain describes competition as intensifying.
First Half of 2026: Higher Value and Contested Bids
RECOFDATA, the Japanese deal database, records sponsor deals in Japanese targets up 2.8% in number in the first half of 2026 and up about 1.4-fold in value, from ¥3.1 trillion to ¥4.4 trillion, while total Japanese M&A value fell 20.1% to ¥18.2 trillion. Sponsors took a larger share of a smaller pie, and their listed purchases run through a tender offer.
- Tender Offer Bid (TOB)
The Japanese term for a public tender offer: a bidder offers to buy a listed company's shares at a fixed price for a set period under the Financial Instruments and Exchange Act. Most Japanese take-privates start with a TOB, followed by a squeeze-out of remaining holders once the bidder controls enough votes, usually at least two-thirds.
Because the offer is public and runs for weeks, a rival can counter while it is open, turning a negotiated take-private into an auction with every price published.
A contest multiplies the bank work. The target's special committee needs valuation and fairness advice, and each bidder needs a tender offer agent, a yen acquisition loan and fast-moving advisers. A financial sponsors group (FSG) at a global bank competes for those seats against the megabanks, whose lending dominates Japan's sponsor landscape and its yen lenders.
Europe: Larger Deals, Thinner Fundraising
Europe's 2025 recovery was a story of deal size. Bain's European fact base, which counts buyouts by target location on Dealogic data and excludes add-ons, records $235 billion of buyout investment, up 11%, while deal count fell 6%. Germany, Austria and Switzerland (DACH) rose 136%, while the UK fell 30%. Bain notes that the syndicated loan market reopened and took share back from direct lenders, and that exit value rose 64% on a flat count while the unsold stock grew to about 15,000 companies worth about $850 billion.
Two Fundraising Counts Pointing Opposite Ways
European buyout fundraising is where definitions matter most. Bain, on Preqin data, counts about $89 billion for 2025, down 43%, mainly because no fund above $5 billion reached a final close after such funds supplied about 45% of 2024's buyout capital. Invest Europe counts €103 billion, up 33%. Both are right:
| Publisher | What it counts | 2025 buyout reading |
|---|---|---|
| Bain (Preqin data) | Europe-focused funds, once, at final close | About $89 billion, down 43% |
| Invest Europe | Amounts European-based managers raised at any closing | €103 billion, up 33% |
Invest Europe's figure is incremental, recording money as funds raise it, so flagships still in market add to it before they finish. Its own final-close count for buyout funds was €75 billion across 113 funds.
First Half of 2026: Resilient Deals, Lagging Exits
PitchBook's Q2 2026 European PE Breakdown shows second-quarter deal value up 6.9% on the first and the US lead in deal value narrowing to about 35% in the first half from 57% in 2025. Take-privates defined the quarter: 11 deals worth close to €20 billion, led by EQT's recommended €12.6 billion offer for Intertek at a 62% premium. The UK took 30% of second-quarter value, its largest share since 2019, as the main entry point for US capital, and cross-border deals reached 70.1% of first-half value.
Exits lagged. Exit value hit a three-year high in the second quarter, but 22 mega-exits supplied 65.8% of the total, and the deals-to-exit ratio climbed to 2.9x in the first half from 2.4x in 2025. Fundraising was on pace for its weakest year in a decade, and on June 11 the European Central Bank (ECB) raised rates by 25 basis points, its first increase since 2023. Coverage tilts toward cross-border take-privates and mid-market managers, under the national rules in Europe's sponsor firms and deal mechanics.
The Gulf: Sovereign Capital Moving Into Deals
The Gulf is not a buyout market in the Japanese or European sense. Its weight comes from sovereign wealth funds investing abroad as limited partners, co-investors and co-sponsors, the positions laid out in the spectrum from fund investor to sole buyer, and trackers measure it differently.
- Sovereign Deployment
The value a tracker attributes to a sovereign wealth fund or other state-owned investor across the transactions it joined in a period, including its share of consortium deals. It measures commitments to new deals, not cash drawn or assets under management.
The Global SWF 2026 annual report counts $278 billion deployed in 2025 by state-owned investors, sovereign funds and public pensions together. The seven largest Gulf funds, its Gulf 7, supplied 43%, $119 billion, up 43%. Saudi Arabia's Public Investment Fund (PIF) led at $36.2 billion, but only $12.2 billion once its largest transaction, the Electronic Arts buyout, is excluded; on that view Mubadala, at $33.7 billion, led for a second year. Regional press coverage of the report puts PIF's private equity deployment at $33.1 billion and Mubadala's at $23.0 billion.
The first half of 2026 broadened the pattern. Gulf funds deployed a record $53.9 billion across 108 deals, according to The National's report on Global SWF's half-year data, more than a third of the $143.6 billion state-owned investors deployed worldwide, with Mubadala the largest Gulf deployer at $15.2 billion. Gulf funds joined 21 of the 42 state-investor deals of $1 billion or more, as frequent co-investors, and sent nearly half their capital to the US.
For banks, Gulf capital arrives mostly as consortium seats: equity for large take-privates, co-investment beside sponsors and, later, stake sales. Sovereign funds have also become larger sellers in the secondary market for fund interests, and the relationships often sit in Riyadh and Abu Dhabi, as the guide to banking in the Gulf explains.
Japan, Europe and the Gulf Compared
Side by side, the markets differ in driver, constraint and the product mix they ask of a bank; each figure stays inside its own survey.
| Japan | Europe | Gulf sovereigns | |
|---|---|---|---|
| Main driver | Governance reform | Cheaper entry, US capital | State capital, no fund term |
| Latest full year | Record ¥2.4 trillion of exits (Bain) | $235 billion of buyouts, up 11% (Bain) | $119 billion by the Gulf 7 (Global SWF) |
| Latest 2026 period | ¥4.4 trillion, first half (RECOFDATA) | Deal value up 6.9%, second quarter (PitchBook) | Record $53.9 billion, first half (Global SWF) |
| Main constraint | 60% to 80% premiums | Exits trail deals at 2.9x | One deal can dominate a year |
| Bank work | Committee advice, tender agents, yen loans | Cross-border take-privates | Consortium equity, stake sales |
Japan and Europe are asset markets, where the question is how many companies change hands and at what price; the Gulf is a capital source, whose question is where its money goes. Forecasts belong with the forward view across sponsor markets.
A Regional Figure Locates the Asset, Not the Capital
Deal surveys assign a transaction by where the company sits, Bain's European figures by the target's location, while the capital increasingly comes from elsewhere. A Stockholm-listed firm bid for Kakaku.com from its Asian fund. Innio, the gas engine maker owned by Advent and the Abu Dhabi Investment Authority, listed on Nasdaq in June 2026 and lifted Europe's exit total in PitchBook's count. Gulf funds sent nearly half their first-half capital to the US, where deal surveys record it as American activity.
The markets are less separate than their tables suggest. Japanese take-privates draw European and American funds, European deals draw US sponsors through London, and Gulf money lands in all three as co-sponsor equity. A region's latest number measures the assets changing hands inside its borders; the clients who decide those deals, and choose their banks, are increasingly headquartered somewhere else.
