What slower fundraising and stuck exits mean for private equity hiring, and for bankers planning a move to the buy side
For most analysts and associates, private equity is still the default next step. It is also where the pipeline is tightest. U.S. PE deal value fell 13.6% from a year earlier in the third quarter and exit value fell 14.1%, according to PitchBook data reported by Fortune. Fundraising is on pace to come in under $300 billion for the first time since 2020, PitchBook says.
The seats bankers compete for depend on that cycle. When firms can’t sell companies, they return less money to their investors, raise smaller funds and hire fewer associates. Bankers planning a 2027 move should plan for a tighter door and a more selective buyer.
What the numbers say
The slowdown shows up at both ends of the PE cycle: fewer companies bought and fewer sold.
| Measure | Latest reading | Source |
|---|---|---|
| U.S. PE deal value, Q3 2026 | Down 13.6% year over year | PitchBook via Fortune |
| U.S. PE exit value, Q3 2026 | Down 14.1% year over year, even after a Q3 rebound led by sales to strategic buyers | Fortune; PitchBook |
| U.S. PE fundraising, 2026 | On pace for under $300 billion, the first time since 2020, and the only segment set to decline year on year | PitchBook |
| U.S. PE assets under management | More than $3 trillion, growing at roughly half its historical ~12% a year | PitchBook via Fortune |
Private equity hiring is starting to follow. Partners Group has cut or reassigned dozens of roles in its private equity unit of more than 200 people, moving some staff into its infrastructure and royalties businesses, Bloomberg reported on Oct. 16 (via Swissinfo). The firm cited a regular performance review and says its PE team “remains consistent with its long-term average,” and the cuts also follow firm-specific pressures: rising withdrawal requests from its evergreen funds and shares down about 40% this year.
Meanwhile, firms that can’t sell are holding longer. GP-led secondaries, mostly continuation funds that let a firm keep its best assets while giving investors a way out, reached $65 billion in the first half of 2026, up 35% from a year earlier, per Evercore’s review (via Crypto Briefing).
Enter the “forever” fund
The newest answer to stuck exits is to stop exiting at all. Goldman Sachs, Evercore, Jefferies, Raymond James and Lazard are pitching “forever funds” to private equity firms and testing appetite among institutional investors, Bloomberg reported on Oct. 19 (via Investing.com).
- What they are: evergreen continuation vehicles with no fixed end date, built to hold a firm’s best companies for 10 to 15 years instead of the roughly five years of a standard continuation fund.
- How investors get out: cash flow from the companies, periodic secondary tender offers and staple financing commitments, rather than a sale of the business.
- Why now: high borrowing costs and soft valuations have kept exits slow, and sponsors have already leaned on continuation funds and even “CV-squared” deals that move an asset from one continuation vehicle into another.
- The catch: longer holds will draw scrutiny of carried interest, fees and growth assumptions, and they raise liquidity and governance questions for investors.
For bankers, the takeaway is twofold. Fewer outright sales mean fewer classic sell-side mandates and fewer new buyouts for associates to work on. But the structuring work behind these vehicles is growing, and it sits squarely in the private capital and secondaries advisory teams on our list of new exits below.
Why stuck exits slow private equity hiring
- Exits stall. U.S. PE exit value fell 14.1% year over year in Q3.
- Less cash goes back to investors. Fewer sales mean fewer distributions to the funds’ investors.
- Fundraising gets harder. Investors wait for cash back before committing to the next fund.
- Smaller funds, fewer new deals. Deal value fell 13.6% in Q3; continuation funds hold companies longer.
- Fewer associate seats, more competition. Firms hire less and can be choosier about who they take.
PE firms raise new funds on the strength of cash they have returned, so a slowdown in exits works its way down to the associate class within a fund cycle or two.
Private equity hiring is a two-speed market
The slowdown is not hitting every firm equally. The largest platforms are still raising: KKR hit its $300 billion fundraising goal, per Fortune. Capital keeps concentrating, PitchBook says, “leaving more managers competing for a smaller slice of the fundraising pie,” and mid-market funds that need exits to show returns before their next raise feel it most.
That split shapes who gets hired. Firms with fewer seats can afford to be picky, and the profile they reach for is predictable:
- Live sponsor-deal experience. Bankers who have run buyouts, add-ons and refinancings for PE clients, not just strategic M&A.
- Strong modeling under time pressure. LBO and paper-LBO tests carry more weight when the bar rises.
- Sector depth where money is still moving. Funds that are deploying favor candidates who already know their sectors.
- A clean story for why PE now. In a slower market, “everyone in my class is going” is not an answer.
What slower private equity hiring means for you, by level
First-year analysts (on-cycle 2028). Expect a smaller, more selective cycle and banks that are watching. JPMorgan’s 2025 rule still stands: analysts who accept a future-dated buy-side offer within their first 18 months lose their jobs, and Goldman asks juniors to attest each quarter that they haven’t accepted one, per IB Interview Questions (May 2026). After a pause, the 2027 on-cycle restarted in January 2026, but more seats are moving off-cycle: Apollo says it fills less than half of its associate seats on-cycle, and some firms are setting aside up to half of their class for off-cycle hires. Use this year to get onto sponsor-side deals, so your deal sheet answers the first question PE interviewers will ask.
Second- and third-year analysts. If 2027 offers are thin, another year in the right seat can be worth more than a rushed move. A lateral into sponsors coverage, leveraged finance or an M&A team with heavy PE clients builds the experience funds are screening for, and it keeps you visible when hiring picks back up.
Associates. The post-MBA and direct-to-PE associate route is narrower when funds are hiring less. Weigh a PE offer against the cost of leaving banking mid-cycle, including unvested deferred pay. With fewer peers leaving, associates who stay may also gain leverage on promotion and pay at their current bank.
The new exits
Slower private equity hiring is redirecting banker talent, not trapping it. The fastest-growing exits are the ones the logjam itself creates: firms holding companies longer, lenders filling financing gaps and investors looking for a way out of old funds.
| New exit | Why it’s growing now | Who gets hired |
|---|---|---|
| Secondaries, continuation and “forever” funds (buy side or advisory) | Total secondaries hit $226 billion in 2025, up 40%, per Evercore (Institutional Investor); GP-led deals reached $65 billion in H1 2026, up 35% | Bankers who know fund structures, LP economics and valuation; M&A and private capital advisory backgrounds |
| Private credit and credit secondaries | A $1.9 trillion market where loans get extended when exits stall; credit secondaries nearly doubled to $20 billion in 2025 (Institutional Investor). Fundraising fell from $340 billion in 2021 to $154 billion, so hiring is selective | LevFin, DCM and restructuring bankers who can underwrite downside |
| Infrastructure and royalties | Partners Group moved some PE staff into these units (Swissinfo) | Power, energy, industrials and project-finance bankers |
| Portfolio operations and value creation | Longer holds put the return on improving companies; Partners Group says driving distributions now requires “greater operational intensity” | Bankers with operating curiosity; often a later move, not a first exit |
| Off-cycle PE and growth equity | Some firms are setting aside up to half of their associate class for off-cycle hires (IB Interview Questions) | Second- and third-year analysts with sponsor deal experience |
| Restructuring, special situations and transaction advisory | Extended loans and longer holds create work on liquidity and recapitalizations | Bankers who want distressed exposure and deal volume (Prospect Rock) |
| Corporate development and the CFO track | Strategic buyers led Q3’s exit rebound (PitchBook) | Sector bankers who know a company’s buyers and targets |
Staying in banking belongs on this list too. With bank pay strong and the buy side slowing, leaving should be a decision, not a default; see our piece on rethinking your exit in the year of the bank.
The bottom line
The PE door is not closed, but it is narrower, and the firms on the other side are choosier. The bankers who come through it in 2027 will be the ones who spent 2026 on sponsor-side deals, kept their modeling sharp and timed their move to the market, not to their class.
For some, the better move is a lateral into a sponsor-facing group at a stronger bank first. If you are weighing PE against staying in banking, or want to know which groups and banks will position you best for the next cycle, Prospect Rock Partners can help you map it out. For timing, see our guide to the private equity recruiting timeline: on-cycle and off-cycle options.
Sources: Fortune, Oct. 12, 2026 · PitchBook Q3 2026 US PE Breakdown · Swissinfo/Bloomberg, Oct. 16, 2026 · Bloomberg, Oct. 19, 2026 · Investing.com, Oct. 19, 2026 · Institutional Investor, Feb. 17, 2026 · Crypto Briefing, Aug. 12, 2026 · IB Interview Questions, May 12, 2026