Private Equity: Fundraising, Exits and Secondaries — 2026-10-23

Top developments

Blackstone’s Exit Bottleneck Hits Earnings

Blackstone Inc. reported a 9.2% decline in third-quarter distributable earnings to $1.72 billion, as higher interest rates and inflation slowed dealmaking across the private equity sector. The firm’s assets under management rose 10% to $1.37 trillion, with $228.9 billion in dry powder, but investment exits weakened, tempering overall profitability. The results underscore the broader industry challenge of exiting investments at valuations required by investors, with legacy real estate assets specifically dragging on earnings growth.

FFL Partners Closes $1.35 Billion Fund VI

FFL Partners announced the final close of FFL Capital Partners VI LP with over $1.35 billion in commitments, exceeding its $1 billion target and marking a 50% increase over its fifth fund closed in 2022. This oversubscribed close indicates that despite market volatility, limited partners are still willing to deploy capital into firms with strong track records and clear investment theses.

South Korean LPs Turn to Secondaries for Liquidity

In South Korea, global institutional investors are increasingly looking toward secondaries markets to manage liquidity pressures caused by delayed exits, according to Financial News. Despite maintaining or expanding commitment levels, these investors are favoring established managers over emerging firms, citing a need for verified performance amid a "capital freeze" for newer funds.

Local view

Korea: Institutional Commitments Halve; New Association Forms

Seoul Economic Daily reports that new commitment amounts for institutional-only private equity funds in South Korea are expected to fall to 11 trillion won this year, roughly half of the previous year's level, due to high interest rates and capital outflows to stock markets. Additionally, major Korean PE managers have formed a new association to unify lobbying efforts, targeting approval from the Financial Services Commission this month. The Ministry of Science and ICT’s affiliate, Woori PE, was selected as a priority negotiator for a 245 billion won blind fund project, alongside five other firms.

Japan: Omron Carve-Out Highlights PE Activity

In Japan, Carlyle Group is acquiring Omron’s electronic components business (Device & Module Solutions) for 81 billion yen, a significant carve-out deal that highlights the continued activity in Japanese corporate restructuring. This transaction, announced in March but detailed in recent analyses, involves Omron retaining a 5% stake, illustrating the complex structural deals PE firms are navigating in the region.

Context & numbers

• Secondaries Pricing: Continuation vehicles now represent roughly 48% of total secondary market volume, with median deals pricing at 97.0% of Net Asset Value (NAV) according to Houlihan Lokey data.
• Fundraising Trends: Align Capital Partners closed its fourth fund at a hard cap of $770 million, while raising a combined $1.1 billion across two vehicles, demonstrating continued strength in independent-sponsor-focused strategies.
• Market Scrutiny: Private equity investors are demanding stricter scrutiny of buyout terms, citing concerns over transparency and conflicts of interest, which is impacting how deals are structured in the current environment.

On the radar

• Xbox Rumors: Reports indicate that private equity firms briefly considered a potential $100–150 billion buyout of Microsoft’s Xbox unit, though discussions were exploratory and short-lived.
• Blackstone Energy Fund: Blackstone has closed its fifth energy fund at an $8.7 billion hard cap, signaling continued appetite for energy transition assets despite broader market slowdowns.
• LP Elections: Market conventions for continuation fund LP elections remain at 20 business days, but ILPA’s 2026 draft guidance proposes extending this to at least 30 days, which could alter deal timelines if adopted.