Private equity owns roughly 33,000 companies it has not sold.

Bain puts the unrealized value at about $3.8 trillion, and nearly 40% of them have been held for more than five years — against 29% in 2019. More than half have been held four years or more, which is the highest share on record.

That is the whole story, and it is not a story about private equity. It is a story about who buys those companies, and on what terms, and whether you can tell the good ones from the ones that have been held seven years for a reason.

Historically, about 30% of any year's acquisitions were sold within four years. Of the companies bought in 2021, only 19% had been sold by 2025.

The average hold at exit is now around seven years, against five to six across the decade to 2021. Nothing dramatic happened. Each year a few more deals did not clear, and the inventory compounded.

The number that LPs actually watch is the cash. Distributions have run below 15% of net asset value for four consecutive years — an industry record — and the most recent full-year reading, around 14%, is the lowest since 2008–09. Measured against assets under management rather than NAV, McKinsey put distributions at roughly 6% for the six months to June 2025, against a 14% average for the decade to 2024.

For a CFO this matters for one reason. A sponsor that cannot show cash back cannot raise its next fund on the same terms. That is the pressure, and it does not go away by waiting.

This is the part that has changed in 2026, and it has changed quietly.

Continuation funds were supposed to be the relief valve, and they cannot carry the weight. Count them one way and they are shrinking: PitchBook puts continuation-vehicle deals at 95 worth $47.4 billion in the year to September 30, against 161 worth more than $97.6 billion in 2025. Count them another and they are booming: Evercore has GP-led secondaries up 35% year on year in the first half, with single-asset vehicles up 88%. The two are measuring different things — identifiable deals against intermediated volume including preferred equity — and it is worth knowing the disagreement exists if someone quotes either number at you. What both sides agree on is scale. Continuation vehicles run somewhere between 10% and 14% of sponsor-backed exits. At 33,000 companies, a route that moves a tenth of exits is not an exit.

The secondaries bid is close to fully committed. Evercore puts secondary dry powder at about $194 billion against a capital overhang near 1.0x, which means available capital equals roughly one year of volume, and notes there is "less room for a pause in fundraising or a sharp acceleration in deal volume." Jefferies has dedicated capital falling from $327 billion to $290 billion. Lazard reports that roughly 27% of GP-led transactions failed or were paused in the first half of 2026.

And the debt-funded workaround is closing. US dividend recapitalization volume in the broadly syndicated loan market ran $28.7 billion through early September, down 39% on the same period of 2025. One caveat worth carrying: that series cannot see private-credit-funded recaps, which is where a good deal of the activity has migrated.

Three routes around a sale. One cannot scale, one is nearly fully committed, and one is closing.

A piece that stopped there would be misleading.

Sponsors are not behaving like forced sellers, and the clearest evidence is price. More than 75% of buyout assets are still exiting above their next-to-final mark, broadly in line with historical patterns. Single-asset continuation vehicles have been pricing at or above par. Forced sellers do not clear at those levels.

Exit value is also recovering rather than seizing up. Third-quarter global exit value came in around $481 billion, up roughly 65% on the quarter — though US exit value was down about 14% against a year earlier, so the recovery is uneven rather than uniform.

And the part that cuts hardest against the simple version: US private equity exits to strategic buyers fell from $192 billion in the first half of 2025 to $112 billion in the first half of 2026 — down 42%, with the deal count at its lowest since late 2024. Trade sales did rise as a share of exits, to roughly 71% of global value. But they rose because sponsor-to-sponsor collapsed, not because corporate buyers stepped forward.

So there is no flood coming. Anyone telling you otherwise is selling something.

The stock is enormous and old. The flow is recovering. Both are facts, and together they produce a specific condition rather than a dramatic one.

At 33,000 companies, even a record exit year barely moves the inventory. That is the insight. A good year clears the top of the queue — the large, clean, growing assets that were never really stuck. What remains is the long tail, held longest, and that tail is getting older rather than smaller.

Which means corporate buyers should expect not a wave but a long, steady, buyer-favorable supply of assets, weighted toward businesses that have already failed to sell at least once.

That is a better market to buy in than a frenzy. It is also a more dangerous one, because the reason an asset is available is no longer "the sponsor's fund is ending." It might be. Or the business might have a problem that three previous processes found.

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The Fed meets today and tomorrow, with the decision announced Wednesday afternoon. Futures put the odds of no change at about 90%, and the funds rate sits at 3.75–4.00%. There is no Summary of Economic Projections at this meeting.

So the decision is close to settled, which makes it the least interesting part of the week. December 9 is the meeting to plan around. Markets put a December hike at roughly three in four, September's projections had most policymakers penciling one more increase this year, and the next dot plot arrives with it.

One follow-up we owe you. Two weeks ago we argued the IPO and valuation squeeze was a discount-rate problem rather than a sentiment problem, and said plainly that it reverses when yields fall rather than when confidence returns.

Yields have started to fall. The ten-year peaked at 5.31% on October 5, sat at 5.24% when we wrote that, and closed Friday at 5.00%.

Thirty-one basis points is a test, not a verdict. October 5 was a twenty-four-year high, and 5.00% is still well above the 4.44% twelve-month average — so this is easing from an extreme, not a return to normal, and a single move does not rebuild a 2021 valuation. But the mechanism we described is the one now being tested, and if the long end keeps easing the first thing to move should be the deals that could not price — not sentiment, and not the VIX, which never was the constraint.

And one complication we should own. Two weeks ago we said a good part of the yield move was energy, and that energy shocks can unwind. Oil has since gone the other way — Brent sits near $115, up roughly 78% on a year ago and higher than when we wrote that — and the long end fell anyway. So whatever is pulling yields down, it is not the inflation channel we pointed at. That is worth knowing if your 2027 plan is keyed to oil.

What to watch rather than the headline: whether the long end stays at or below 5% after Wednesday. A hold with hawkish guidance that pushes the ten-year back above 5.15% tells you more about your 2027 discount rate than the decision itself.

Four things every CFO needs to know this week.

· The secondaries market has a concentration problem worth understanding. Lazard reports that 6% of investors hold roughly 43% of the capital deployable into GP-led secondaries in the second half of 2026. If you are ever on the other side of a continuation-fund process — as a seller, a co-investor, or a management team being rolled — that is who sets the price. A market where one investor in seventeen holds nearly half the deployable capital is not really a market.

· Dry powder has never been older. As of mid-2025, more than 40% of the capital available to sponsors had been uncommitted for at least two years — fifteen points above the five-year average, and a peak. Separately, Bain puts global buyout dry powder at roughly $1.3 trillion, most of it raised in 2022 and 2023 vintages. Those are two different measures, so resist multiplying them. Aging capital is impatient capital, and if you are the one selling, that is the fact most on your side.

· The beat rate is strong. The beats are thin. On FactSet's October 23 update, with 24% of the S&P 500 reported, blended third-quarter earnings growth sat at 29.5%, and 83% of companies had beaten on EPS against a five-year average of 78%. But in aggregate they beat by only 2.1%, against a five-year average of 7.5% — and revenue beats were running below average at 66% against 70%. Two weeks ago we passed on FactSet's expectation that the actual figure would land above 35% once companies beat. On this magnitude it will not. A high beat rate with thin beats means a lot of companies clearing lowered bars by a hair, which is a different signal from genuine upside. Health care is the only sector reporting an outright earnings decline — and with Alphabet, Microsoft and Amazon all reporting this week, the blended number will move.

· Nine weeks until eight new standards take effect at once. In August we wrote that the expense-disaggregation disclosure lands in 2028 and the work starts in five months. That date is January 1. What was less visible then: ASU 2024-03 is one of eight standards effective for annual periods beginning after December 15, 2026 — alongside revised identification of the accounting acquirer when a variable interest entity is acquired, share-based consideration payable to customers, refined derivative scope exceptions, the gross-up approach for purchased loans, targeted hedge accounting changes, a codification update whose thirty-three amendments include a retrospective change to earnings per share, and the initial measurement of paid-in-kind dividends on equity-classified preferred stock. If your 2027 readiness plan has one line on it, it is short seven. And the test is not public versus private but public business entity — six of the eight apply to everyone on the same date, hedge accounting is a year later for non-PBEs, and expense disaggregation does not apply to private companies at all.

1. How long have they held it, and has it been to market before? A seven-year hold is either a business the sponsor did not want to part with cheaply or one nobody would buy. Those look identical in a data room and are opposite in value. Ask directly how many processes it has been through, and treat a vague answer as an answer.

2. What does the capital structure need from this transaction? If the sponsor needs the proceeds to clear a maturity wall or deleverage a portfolio company that cannot refinance at current rates, you are not buying a business — you are funding a balance-sheet repair. That is sometimes still worth doing, at a different price.

3. What has been taken out already? Dividend recaps in the syndicated loan market are down 39% this year but ran $72 billion in 2025. Check what has been distributed, when, and what it funded. A business that has already paid for itself is being sold for different reasons than one that has not.

4. Could your own finance function absorb it? This is the question that gets skipped, and the one that determines whether the deal works. Not whether you can close it — whether you can consolidate it, report it, and run it. If the answer requires people you do not have, the integration cost belongs in the price, not in next year's surprise.

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The exit market is working again for the assets that were never really stuck.

What it is not doing is clearing a backlog of 33,000 companies, because at that size a record year is a rounding difference. The queue is not a queue. It is an inventory, and it is aging.

For anyone who buys businesses, that is the most useful thing to understand about the next two years. The assets will keep coming, the sellers will be more motivated than they will admit, and the reason any particular one is available will matter more than the market conditions it is being sold into.

One question before you go: if an acquisition landed on your desk this quarter, what would be the binding constraint?

One click. And if you have a view on why, reply — we read everything.

The Editors hold no position in any company mentioned.

— The CFO Desk
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