Private equity increasingly relying on acquisitions in 2026 / Only one in three respondents considers M&A process "efficient" – from deal to integration

• For 24 percent of respondents, M&A is now the most important value driver, up from 7 percent the previous year
• Acquisitions are particularly frequent in the healthcare sector, though execution succeeds there less often than average
• Many funds are making acquisitions even though overall return expectations are lower than in previous market phases

No other measure examined for increasing the value of portfolio companies has shifted so sharply on the priority list year-over-year as M&A. A year ago it was still in last place; now it is in first. In 2025, the top priority was still cost optimization (this year: fourth place). 24 percent of respondents now cite transactions as the most important value-creation lever, up from 7 percent the previous year. The report attributes this return partly to more stable capital costs, which are making transactions more predictable again. Decision-makers were asked for their assessment of their own portfolio companies, and the results are based on self-reported data.

"Several developments are currently coming together in the German economy: corporations are divesting business units, family businesses are seeking succession solutions, and private equity funds are expanding their portfolios through targeted acquisitions. That's why we expect transaction activity to increase further by the end of the year," says Andreas Stöcklin, Senior Managing Director and Head of the Transactions practice at FTI Consulting in Continental Europe. "At the same time, the focus at the portfolio level remains unchanged on operational value creation – in a market environment where traditional value levers are increasingly losing their effect."

Only a minority is satisfied with execution

When it comes to evaluating their own transactions, the PE decision-makers surveyed paint a mixed picture. On the one hand, the majority (51 percent) report that their acquisitions actually exceeded the targets set. On the other hand, 65 percent describe the execution of their deals – from origination to integration – as not efficient or not very efficient. No other lever performs as poorly: while supply chain management is considered efficiently executed by 61 percent of respondents and cost optimization by 60 percent, for M&A the figure is only 35 percent.

According to respondents, three factors repeatedly make transactions difficult: the complexity of integration, valuation gaps, and cultural conflicts between the acquiring and target companies. Acquisitions also take the longest to show results: only a quarter of respondents identify a measurable value contribution after just twelve months, while other levers such as cash and cost optimization show effects sooner.

"Return expectations today are often below the levels seen in earlier market phases," says Andreas Stöcklin. "Funds continue to act very selectively, but are more creative and flexible in structuring transactions and in using alternative financing instruments. Value creation today must be shaped much more actively. At the same time, the private equity secondary market – where existing fund stakes are traded – is growing. This market segment is increasingly being shaped by the fund managers themselves, for example through so-called continuation funds. In these, the fund manager transfers selected portfolio companies from an existing fund into a newly established successor fund. Existing investors can sell their stake or continue to participate in the companies, while new investors invest in the established assets."

What the successful funds do differently

The gap between PE firms becomes clear when looking at the group the report calls "high performers": funds whose portfolio companies, according to their own reports, exceeded the targets set on average over the past twelve months. This group reports efficient execution of their acquisitions almost twice as often as the rest (46 versus 29 percent).

"Whether a deal delivers or exceeds expected returns is decided in the execution – and that is exactly where funds and their portfolio companies should now focus," says Andreas Stöcklin. "The PE firms that most frequently exceed their targets don't simply do more deals – they build acquisitions into a core competency of their own. Specifically, that means: established processes for integration, a first-100-days plan that is in place before closing, a dedicated team that manages only the integration, and early merging of corporate cultures."

Major differences between industries

According to respondents, how well acquisitions pay off differs significantly by industry. Transactions most frequently exceed their targets in retail and in the insurance sector – 63 percent of respondents in each case report this – followed by life sciences at 60 percent. At the lower end are telecommunications and consumer goods manufacturers, each at 42 percent.

Activity and success diverge particularly sharply in healthcare: 77 percent of respondents report brisk acquisition activity there, yet only 44 percent achieve their targets and only 32 percent execute acquisitions efficiently. For consumer goods manufacturers, the report cites one reason for the weak track record: brand-strong companies are quickly bid up in auction processes, so the purchase price ends up reflecting brand value rather than actual earning power – and post-acquisition growth expectations are then disappointed.

"The industry figures again show a strong concentration of transactions in select sectors," says Andreas Stöcklin. "In various areas of healthcare, increasing regulation meets a market that remains highly fragmented. As a result, nearly every acquisition becomes a complex integration project, regardless of transaction size. In the consumer goods sector, on the other hand, even the best integration helps little if the purchase price achieved in the bidding process doesn't reflect the brand's sustainable earning power. Anyone seeking to successfully expand through inorganic growth in these markets needs both: discipline in the M&A process and an independent assessment of what value-creation potential can actually be realized by combining business activities."

About the study / methodology:

FTI Consulting surveyed 555 decision-makers from private equity firms worldwide across 14 countries, 36 percent of them in the Europe, Middle East, and Africa (EMEA) region. Nine core measures for increasing the value of portfolio companies were assessed, along with two supporting factors, including artificial intelligence (AI), among other things by frequency of use, execution, time to impact, and goal achievement. The results are based on respondents' self-assessments of their portfolio companies.

The full study can be found here.

About FTI-Andersch

FTI-Andersch is a management consulting firm that supports its clients in developing and implementing sustainable strategies for the future, performance improvement, and restructuring. FTI-Andersch actively supports companies that are facing strategic, operational, or financial challenges and change processes – or that wish to proactively align their business models, organizations, and processes for the future. Its clients include, in particular, medium-sized companies and corporations that operate internationally. FTI-Andersch is part of the FTI Consulting Group (NYSE: FCN), which has more than 8,100 employees worldwide.