Quarterly Private Markets – Q3 2026

Alternative Investments Overview

The third quarter saw private markets regain momentum as private equity exits accelerated, private credit continued to deliver stable returns, and significant capital flowed toward AI infrastructure opportunities. Despite ongoing economic uncertainty and liquidity challenges in some areas of the market, underlying fundamentals remain constructive across private equity, private credit, and private infrastructure.

 

Private Equity

Q3 saw a meaningful rebound in private equity exit activity, with U.S. exit value increasing roughly 50% from the prior quarter, as shown below. After several years of slower exit activity, more companies were successfully sold or taken public in Q3 2026, allowing private equity funds to return capital to investors. As those proceeds are distributed, investors can reinvest in new opportunities, supporting fundraising and helping private capital continue to flow through the market.

However, overall deal activity remains relatively muted with ongoing economic and geopolitical uncertainty. Fundraising activity also continues to lag, with capital increasingly concentrated among the industry's largest managers and fewer firms successfully raising new funds in the current environment.

Q2 Global Private Equity returns came in at +5.6%¹, boosted by a strong quarter for venture capital at +12.7%¹.

Q3 2026 Global PE First Look - PitchBook

Private Credit

One of the more notable developments during the quarter was increased transparency in private markets.

Apollo Global Management announced plans² to provide daily pricing across its private credit platform, a notable shift for an asset class that has historically relied on periodic valuations. While daily marks do not eliminate the illiquid nature of the asset class, they may help investors better understand portfolio values and could improve confidence in private market structures over time.

Apollo's rollout of daily pricing across its credit platform is generating a lot of discussion throughout the alternatives industry. The move is viewed as part of a broader effort to make private credit look more like traditional fixed income, with more frequent valuation updates, standardized data, and improved price discovery.

It is important to note that more frequent pricing does not create liquidity. For example, a homeowner may estimate the value of their house every day, but that does not mean the house can be sold immediately. Similarly, a mortgage loan may have a reasonable estimate of value, but it cannot be readily converted to cash like a publicly traded bond. Private credit investments are no different. Daily pricing may improve transparency, but the underlying assets remain long-term and relatively illiquid investments.

Q2 Global Private Credit returns came in at +1.7%¹.

 

Private Infrastructure

AI continues to reshape private market capital flows. Some of the largest private capital commitments and financing initiatives ever announced occurred during the quarter.

NVIDIA announced a partnership³ with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR to establish financing platforms expected to mobilize more than $500 billion of capital for AI infrastructure buildout over time, highlighting the growing role of private capital in funding the next generation of data centers and computing infrastructure.

Waymo also announced⁴ an additional $5 billion debt financing facility to support its continued expansion, following its initial $16 billion equity raise earlier this year. This deal includes participation from institutional lenders including PIMCO, Blackstone, and Sixth Street, and further underscores investor demand for scaled AI and autonomous technology businesses.

These transactions illustrate a broader trend across private markets as the demand for AI infrastructure continues to accelerate, private capital is playing an increasingly important role in financing the technologies, data centers, and computing capacity required to support the next generation of innovation.

Within real assets, private infrastructure returns came in at +2.5%¹, outperforming its public counterpart, which fell (2.2%).

 

Liquidity

Liquidity pressures in private credit persisted during the third quarter, though redemption activity appeared to level off rather than accelerate further. Several large private credit funds continued to hit their quarterly redemption limits during Q3, meaning redemption requests remained above available liquidity windows.

As mentioned above, these restrictions appear to reflect the structural mismatch between investor liquidity demands in private markets and the long-term nature of private credit investments rather than widespread deterioration in underlying loan performance.

This view is supported by continued institutional demand for private credit even as some retail-focused BDCs face redemption pressure and publicly traded BDCs trade at discounts to their reported net asset values. The divergence highlights the ongoing market discussions across pricing, investor sentiment, and underlying credit fundamentals.

 

Looking Ahead 

At this point, interest rates appear likely to stay higher for longer, geopolitical uncertainty persists, and AI's full impact on various industries is still playing out. At the same time, the structural drivers behind private markets are not going away.

Private market investors continue to gain exposure to innovative companies, infrastructure projects, and credit opportunities that are often unavailable in public markets. Improvements in private equity exit activity during the third quarter are an encouraging sign, while continued investment in AI-related infrastructure highlights the significant capital required to support emerging technologies.

The opportunity set heading into the final quarter of 2026 remains compelling across private equity, private credit, and private infrastructure.

 

1 MSCI Private Capital Benchmarks Summary Q2 2026

2 Apollo Expands Daily Pricing to All Credit Assets, Advancing Transparency in Private Credit

3 NVIDIA Partners With Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to Establish AI Compute Infrastructure Financing Platforms to Mobilize Over $500 Billion of Third-Party Capital | NVIDIA Newsroom

4 Waymo Closes $5 Billion Debt Financing to Accelerate Business Expansion

 

The information provided herein represents the opinions of the author and Gradient Investments as of the date of publication and is subject to change without notice. This commentary is for informational and educational purposes only and does not constitute personalized investment advice or a recommendation to buy, sell, or hold any specific security, including the companies named above. Forward-looking statements, including statements about industry trends, pricing, and demand, involve risks and uncertainties, and actual results may differ materially. Investing involves risk, including the possible loss of principal. Data cited from third-party sources is believed to be reliable but has not been independently verified by Gradient Investments.