2026 For Private Equity

 

2026 could be the year that finally speeds up private equity deal making to similar boom levels as during 2021.

The Federal Reserve could lower the Federal Funds Rate two times in 2026, while a spade of coming IPOs, according to various media sources of mega capitalization companies like OpenAI, Anthropic, SpaceX and other large, medium and small companies from technology and other sectors joining and completing IPOs could unlock capital for private equity companies.

The possible large, high publicity IPOs could invoke other companies to do and IPO. IPOs are traditionally a liquidity event for the private equity asset managers.

The IPOs could be a precursor to active deal making, private equity asset managers selling portfolio companies and returning money to their Limited Partners institutional investors pension funds, endowments and insurance companies, thus realizing carry for themselves.

Which could turn 2026 in a very prosperous year for Blackstone, KKR, Apollo, Caryle, Ares, CVC etc. large, medium and small private equity asset managers, according to Wolfteam Ltd.'s projections and estimates.

All this is barring a large, negative geopolitical, economic or of natural consequences event, the happening of which could derail the possible coming IPOs and a wave of deal making.

Will 2026 Be The Year Of The AI Technology IPO?

 

Several large AI startups like Anthropic and OpenAI are preparing to do an Initial Public Offering, IPO in 2026, according to various media outlets. SpaceX is also reported to plan an IPO in 2026.

OpenAI has last raised money at 500 billion USDs and is reported trying to raise 100 billion USDs at 830 billion USDs valuation,currently, all while remaining private.  

Anthropic last raised 13 billion USDs at 183 billion USDs post money private market valuation. 

SpaceX is staging a second market share sale currently that could value SpaceX at 800 billion USD.

SpaceX, OpenAI and Anthropic could be huge IPOs if done in 2026. SpaceX and Open AI, especially could take the top 2 spots in the world historically for money raised from IPOs, ever.

Possible SpaceX, OpenAI and Anthropic could open the IPO floodgates and many more AI technology companies could go public, along with companies from other hot sectors like energy and other sectors.

This could result in hundreds of billions of USDs raised via IPOs. Hundreds of billions of IPOs raised via IPOs in the US, however, could strain the market and be precursor to a selloff and even and AI boom correction, according to Wolfteam Ltd.'s projections.

But barring an unforeseen deeply negative event, 2026 will be one of the best, highest volume IPOs years on record, according to Wolfteam Ltd.'s projections and estimates.

 

What To Expect Of The AI And Private Credit Boom In 2026?

 

Artificial intelligence, AI and private credit investing are the parts of the global economy that attracted the most capital in the last 5 years.

The investments in artificial intelligence, AI will most probably continue in frantic pace in 2026. Only Amazon, Microsoft, Alphabet and Meta plan to invest around 200 billion USDs in 2026 in AI data centers related investments. AI can, according to the forecasts of Wall Street investors and analysts and Silicon Valley investors and technologists and many company CEOs change profoundly how we work and enjoy leisure.

AI will need many more years to fully come to fruition, so in 2026 the AI investment boom will most likely continue, according Wolfteam Ltd.'s projections and estimates.

Private credit is another boom area of the global economy. Private credit funds have replaced banks in high yield lending at 7 % to 15 % rates to risky borrowers. Private credit funds have raised tens of billions of USDs in new assets in the last 5 year, which they plow in private credit. Large part of the private credit lending flows to small and medium technology enterprises further feeding the AI boom.

Since there is high demand for private credit type lending and the returns on private credit are often in double digits per year, the private credit boom will most likely continue in 2026, but a markedly slower pace, according to Wolfteam Ltd.'s projections and estimates.

  

 

Banks And Private Equity Investments

 

Banks are financing and investing in ever more private equity, private credit type investments since the beginning of 2025, according to regulatory filings and news articles.

Regulators have been loosening up bank regulations.

And the largest US banks like JPMorgan, Bank of America, Citigroup, Wells Fargo started writing cheques for billions, in some cases for tens of billions of USDs to finance leveraged buyouts and multi billion USD deals.

The leading banks with large investment banking operations Goldman Sachs and Morgan Stanley are putting up their own capital and capital from the assets they manage on behalf of clients and newly raised by them funds into private equity type deals more and more.

All this loads the financial, banking system with leverage, since private equity investments are in essence leveraged investments and so is in fact private credit high interest loans, which  JPMorgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley are giving out more and more.

The financial system is becoming riskier and more leveraged, according to Wolfteam Ltd.s projections and estimates. But for now regulators and the banking system itself seems to have things under control. 

What If AI Turns Out To Be A Bubble? The Effect On Private Equity Companies

 

According to many Wall Street investors, research analysts and Silicon Valley investors and technologists  artificial intelligence, AI is the fourth industrial revolution and artificial intelligence, AI will change profoundly how humanity works, consumes leisure and communicates.

In short, artificial intelligence, AI could makes us tremendously more productive, according to those forecasts.

However, if the current artificial intelligence, AI turns out to be a bubble, possibly the greatest financial bubble in history the hyperscalers Amazon, Microsoft, Alphabet and Meta will be disproportionately hurt. With them, however the market capitalization and value of small and medium sized artificial intelligence, AI technology companies will suffer. And not only AI companies, but almost all technology companies will loose value if artificial intelligence, AI turns out to be a bubble and bursts. More than 40 % of new technology investments go into artificial intelligence, AI companies. And since most other companies try to instill artificial intelligence, AI in their organizations, if AI bursts the technology sector and a large part of the global economy will be hurt.

Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC etc. and the other leading private equity, private credit, real estate and infrastructure asset management companies, along with small and mid-sized private equity managers have invested large part, in some cases more than 30 % of their newly raised assets under management in the artificial intelligence, AI boom, which means they have invested in artificial intelligence, AI companies, artificial intelligence, AI data centers, energy and infrastructure companies that provide the energy for the artificial intelligence, AI data centers. In short private equity, private credit, real estate asset management firms have financed to a large part the artificial intelligence, AI boom with hundreds of billions of USDs in artificial intelligence, AI related investments.

And if the current AI boom turns out to be a bubble, after artificial intelligence, AI technology companies and the energy companies supplying the artificial intelligence, AI data centers with energy, the next in line to loose hundreds of billions of USDs in value and market capitalization will be the private equity, private credit, real estate and infrastructure asset managers like Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC etc. 

Private equity firms, if artificial intelligence, AI turns out to be a bubble that wipes out trillions of USDs of value will suffer magnified losses since they are triple leveraged on the artificial intelligence, AI boom. Namely, private equity firms via private equity leveraged buyouts of artificial intelligence, AI technology companies take only the equity portion which is around 30 %, while borrowing the rest of the private equity buyout in debt and thus private equity firms leverage themselves several times. Via private credit lending to artificial intelligence, AI technology firms at interest rates of 7 % to 15 % usually, private credit asset managers take out additional leveraged, because their high interest loans are usually the first to be wiped out of the capital structure. In addition, private credit firms invest in securitization via buying Collateralized Loan Obligations, CLOs Collateralized Debt Obligations, CDOs. Private credit companies usually own the most junior tranches of Collateralized Loan Obligations, CLOs Collateralized Debt Obligations, CDOs, so they stand in line to be the first to loose possibly tens of billions of USDs of value. In addition, artificial intelligence, AI is  operationally leveraged. So all private equity, private credit, real estate asset management firms that have invested in artificial intelligence, AI are essentially triple leveraged. Triple leverage magnifies gains, but it also tends to cause multiple fold increase of losses.

If the artificial intelligence, AI boom turns out into a bust, technology companies will loose trillions of USDs of value, while private equity firms will loose hundreds of billions of USDs of value on their investments, according to Wolfteam Ltd.'s projections and estimates.

 

Carlyle And AI

 

Carlyle Group Inc or Carlyle, the world's fourth largest listed private equity, private credit, real estate asset management company in terms of market capitalization and the third largest in terms of managed assets alternative asset manager has invested heavily in artificial intelligence, AI by using its newly raised fund from the last 7 years, especially via its private credit business.

Carlyle, the fourth largest private credit asset manager in the world in terms of assets is using large part of its multi billion USDs raised for private credit to give out loans at 7 % to 15 % interest rates to artificial intelligence, AI technology companies. Artificial intelligence, AI companies, operating in a still fledgling and yet to prove sustainable business are often with sub investment grade rating and are considered risky, high yield or even "junk" bond rated issuers. That is why the loans to the small and mid-sized artificial intelligence, AI technology firms often come with interest rates of 7 % to 15 %.

Big money center banks like JPMorgan, Bank of America, Citigroup and Wells Fargo and even investment banking revenue high banks like Goldman Sachs and Morgan Stanley eschew such sub investment grade borrowers like small and mid-sized artificial intelligence, AI technology companies, because they are considered too risky and thus non bankable. 

Here come companies like Blackstone, KKR, Apollo, Carlyle, Ares, Blue Owl, CVC etc. which finance such  small and mid-sized artificial intelligence, AI technology companies via giving them loans out of their private credit assets under management with interest rates of 7 % to 15 %.

The artificial intelligence, AI hyperscalers Microsoft, Amazon, Alphabet and Meta are different, of course, because they are rated investment grade. The AI hyperscalers Microsoft, Amazon, Alphabet and Meta are hugely profitable each of them making more than 34 billion USDs in profit in 2024. So the AI hyperscalers Microsoft, Amazon, Alphabet and Meta can finance the build out of AI technology data centers themselves via their profits. In 2026 it is forecast that AI hyperscalers Microsoft, Amazon, Alphabet and Meta alone would invest more than 200 billion USDs in AI data centers.

For the small and mid-sized artificial intelligence, AI technology companies companies like Carlyle via their private credit high interest loans are indispensable since many small and mid-sized artificial intelligence, AI technology companies are loss making or cannot afford the multi billions of USDs AI data centers need alone.

So as long as the AI boom keeps going, Carlyle will keep lending out private credit 7 % to 15 % loans to small and mid-sized artificial intelligence, AI technology companies and if AI ends up changing profoundly our world by improving, making more efficient how we work, rest and communicate, Carlyle's market capitalization could rise to 127 billion USDs from its Carlyle's current 21.98 billion market capitalization. , according to Wolfteam Ltd.'s projections and estimates.

On the contrary, if AI turns out to be the greatest bubble in history, Carlyle, due to its leveraged investments in artificial intelligence, AI technology companies, could be disproportionately hurt. 

Ares And AI

 

Ares Management Corp or Ares, the leading private credit, real estate and private equity asset management company has a large exposure to artificial intelligence, AI via mainly its private credit business unit.

Which means Ares Management gives out loans with interest rates between 7 % and 15 % and sometimes even higher interest rates to artificial intelligence, AI technology companies. In the same time Ares uses its real estate assets under management to help build out AI data centers. Add to that that Ares does private equity leveraged buyouts of artificial intelligence, AI technology companies.

Private credit is a hot area in the last 7 years. Small and medium-sized loans have usually below investment grade credit ratings and lending to them would require charging interest rates between 7 % and 15 %. Money center banks and regional banks avoid making such risky loans. So enter large private credit asset managers like Carlyle, Apollo, Blackstone, KKR, Ares etc. which have raised private credit funds exactly to lend out at interest rates at 7 % to 15 %. So Ares and the other mentioned leading private credit asset managers finance the initiatives and projects of artificial intelligence, AI technology companies at 7 % to 15 % interest rate levels.

Artificial intelligence, AI is  operationally leveraged by nature and making basically leveraged loans, which giving out credit at 7 % to 15 % could be called, makes for double leverage and creates layers of risk in the private credit portfolio of Ares.

If the AI boom continues Ares stands to make returns of several fold on their investments and if the artificial intelligence, AI boom turns to bust both the private credit loans and the equity portion of Ares' artificial intelligence, AI private equity leveraged buyouts investments could be wiped out, according to Wolfteam Ltd.'s projections and estimates.

 

When Will The AI Boom Resemble A Bubble?

 

If the hyperscalers technology companies Microsoft, Amazon, Alphabet and Meta start making yearly reported net losses, then the current AI investment boom could resemble many signs of a bubble, according to Wolfteam Ltd.'s projections and estimates.

Another sign could be if the Price/Earnings ratios of  Microsoft, Amazon, Alphabet and Meta and other leading AI companies rise above 55.

A telling sign of first the Dot Com boom, then subsequent bust was that the leading companies in the Dot Com era were unprofitable. 

Nowadays, many Wall Street investors and research analysts and Silicon Valley investors and technologists point to that fact and also tout that now Microsoft, Amazon, Alphabet and Meta and other leading AI technology companies are very profitable.

That said, Microsoft, Amazon, Alphabet and Meta and other leading AI technology companies are investing huge amounts of capital, more than 350 billion USD in 2026 expected. And if these investments don't pay off Microsoft, Amazon, Alphabet and Meta and other leading AI technology companies could start incurring huge losses. Which could burst the possible AI bubble, according to Wolfteam Ltd.'s projections and estimates.

Apollo And AI

 

Apollo Global Management or Apollo, the global leading private equity, private credit and real estate asset management firm is investing large part of its newly raised assets in artificial intelligence, AI trades, namely AI data centers, leveraged buyouts of AI technology companies and private credit lending to AI technology companies, according to Wolfteam Ltd.'s estimates.

Artificial intelligence, AI is the trade of the moment, with many Wall Street investors and analysts and Silicon Valley technologists and investors forecasting that Artificial intelligence, AI is the fourth industrial revolution that will change everything. The Magnificent 7 AI technology companies Microsoft, Amazon, Alphabet, Meta, Apple, NVIDIA and Tesla are beating the S&P 500 for the last 5-7 years.

Apollo invests in Artificial intelligence, AI for several reasons, according to Wolfteam Ltd.'s estimates:

1) Artificial intelligence, AI is touted as the fourth industrial revolution, which is to deeply change how humanity works, rests, etc, with possible corresponding investment gains 

2) Artificial intelligence, AI is the trade that beats the S&P 500 for the last 5-7 years. Apollo is basically forced to invest in Artificial intelligence, AI technology companies by pension funds, endowments, insurers and individual investors in Apollo's funds who are asking why is Apollo not going to beat the indices and achieve outsized investment gains

3) Artificial intelligence, AI technology companies are highly valued, excessively valued by some estimates with huge market capitalization. Thus Artificial intelligence, AI is liquid enough to absorb the close to 500 billion USDs Apollo manages

Artificial intelligence, AI technology companies could turn out to be the latest fad and lead to a AI technology boom and bust akin to the 2000's internet dot com boom and bust, according to many investors and analysts.

The dot com boom and bust bore companies like Amazon and Google, however. So there is a high likelihood that the Artificial intelligence, AI current boom could create the leading technology companies for the nest decades. 

KKR And AI

KKR, the second largest private equity firm invests a significant portion of its newly raised assets in artificial intelligence, AI data centers and AI technology companies, according to Wolfteam Ltd.'s analysis.

KKR does this in order to achieve high returns, beat the S&P 500 and help drive the current AI boom, deemed by many as the fourth industrial revolution.

KKR invests in leveraged buyouts of AI technology firms, gives private credit loans to AI technology firms and data centers and invests part of its real estate portfolio in AI data centers.

Since AI is operationally leveraged and private equity buyouts are financially leveraged this double leverage creates higher opportunities on the upside, but also higher possible losses for KKR.

If the AI boom continues and AI changes our world profoundly, KKR is undervalued grossly, according to Wolfteam Ltd. In an AI positve case KKR's intrinsic value could rise to 430 billion USD from the current 116.42 billion USD.

Is Cryptocurrency Mining A Large Driver Of The Current AI Boom?

 

Cryptocurrency, Bitcoin mining is one of the main drivers of the current artificial technology, AI boom, according to Wolfteam Ltd.'s projections and estimates.

Cryptocurrencies mining is a highly computing intensive mining process and it needs flexible GPU chips like NVIDIA's to work, produce Bitcoins. NVIDIA is the leading company of the current AI boom. Cryptocurrency, Bitcoin mining drives a large part of the AI boom, partially behind the scenes. You need tens, if not hundreds of workstations to mine Bitcoin. All this in data centers equipped with the latest AI chips.

In short, cryptocurrency mining drives a large part of the demand for AI chips.

 

Blackstone And AI

 

Blackstone, the world's largest alternative asset manager with 1.2417 trillion USDs in private equity, real estate, private credit, hedge funds assets under management invests large portion of its newly raised funds in artificial intelligence, AI projects like AI data centers and private equity buyouts of AI technology companies, according to Wolfteam Ltd.'s estimates.

The fact that AI is a focus point of Blackstone's new investments is even stated on its website.  

Blackstone is basically forced along with the other leading private equity firms like KKR, Apollo, Carlyle, Ares, CVC to invest in artificial intelligence, since AI related investments in companies like Microsoft, Alphabet, Meta and Amazon have been beating the general US stock market  for several years now and in addition artificial intelligence is being forecast by Wall Street analysts and investors and Silicon Valley technologists and investors as the fourth industrial revolution. And private equity giants investments like Blackstone's private equity investments are being bench marked against the S&P 500. And according to various sources the average private equity portfolio has been beating the S&P 500 for the last 15 years.

What is more, artificial intelligence, AI provides for operational average and when this is taken atop on the financially leveraged nature of private equity which in general uses 30 % equity and leverages that with 70 % raised debt on average these two leverage factors provide for opportunity to magnify returns several times and bring about a boon for Blackstone's private equity investments.

In addition, investors' high expected return requirements force Blackstone to seek out high yielding private equity investments like artificial intelligence, AI. Here it must be said, that Blackstone is a prestigious, huge firm with extensive resources, which help it in providing management expertise to the AI technology firms it invests its private equity finds into.

In short, the mid-term future of Blackstone's investment portfolio is tied to artificial intelligence, AI, according to Wolfteam Ltd.'s projections and estimates. As the US economy, for that matter.

CVC and AI

CVC Capital Partners PLC, or CVC one of the largest European and global private equity, real estate and private credit asset management firms can reach 144 billion USDs of market capitalization if artificial intelligence, AI lives up to the current forecasts of Wall Street research analysts, investors and Silicon Valley technologists and investors, according to Wolfteam Ltd.'s projections and estimates.

CVC, along with the other leading private equity companies Blackstone, KKR, Apollo, Carlyle, Ares, etc. invests a large part of its raised funds in artificial intelligence, AI related AI data centers and related AI technology companies.

In addition, CVC is very profitable, posting net profit margin of 30 % + in the last four reported quarters.

Private equity in its essence is a leveraged equity investment with borrowed debt. AI and technology is an operationally leveraged investment. All this makers for a magnified effect of profits if private equity investments turn out to be profitable. And profitability begets profitability.

So, in short if AI changes our world as profoundly as Wall Street research analysts, investors and Silicon Valley technologists and investors currently forecast, this would make up for very profitable business for CVC. 

AI technology deals for CVC will increase in count, as in 2021 was evident in the last technology boom, AI deals will beget deals not only for CVC, but for Blackstone, KKR, Apollo, Carlyle, Ares, etc. And CVC's profitability will drive tens of billions of USD in market capitalization value for CVC, according to Wolfteam Ltd.'s projections and estimates.

However, if the current overly optimistic forecasts for AI don't turn out to be correct, US and global stock markets could fall more that 52 %, and CVC, being a leveraged investment in nature could fall even more. 

 

How To Value Private Equity Firms' Investments In AI?

 

Blackstone, KKR, Apollo, Carlyle, Ares, CVC, etc., the leading private equity, real estate and private credit asset management firms are investing more than 32 % of their new funds' assets in artificial intelligence, AI data centers companies, AI technology companies shares and loans to AI technology companies, according to Wolfteam Ltd.'s estimates.

Private equity firms tend to value firms on Earning Before Interest Taxes and Depreciation, EBITDA multiples. Wolfteam Ltd.'s corporate opinion is in agreement with the late great investor Charlie Munger that EBITDA is not a very good approximation for profitability. Especially, given the fact that data centers are depreciated on a 20 year time schedule by the hyperscalers Amazon, Microsoft, Alphabet, Meta and other technology firms. 

A much better measure would be the common Price/Earnings ratio. If artificial intelligence, AI's companies Price/Earnings ratio exceeds 55, this could be deemed a bubble, according to Wolfteam Ltd.'s projections and estimates.

A Price/Earnings ratio of 55 for an AI technology company would incorporate 20 %  yearly revenue growth, with net profit margins exceeding 17 % per year and US GDP growth of 5.7 % per year for the next 15 years. Which is simply a low probability assumption, according to Wolfteam Ltd.'s estimates.

At What Level Would The AI Boom Be Deemed A Bubble?

 

If the trailing Price/Earnings ratio on average for all the companies in the Nasdaq Composite surpasses 55, the artificial intelligence, AI technology boom can start showing signs of a bubble, according to Wolfteam Ltd.'s projections and estimates.

Currently the Nasdaq Composite Price/Earnings ratio is 27.72.

If the Nasdaq Composite Price/Earnings ratio exceeds 55 then the embedded growth expectations would require something like 5-6 % US annual GDP growth for the next 20 years, the largest public technology companies earnings growing by 15 % for 20 years and their net profit margin being above 22 % for the next 20 years to substantiate a Nasdaq Composite Price/Earnings ratio of 55, according to Wolfteam Ltd.'s projections and estimates. 

What Could Stop The Investments In AI Data Centers?

 

Microsoft, Amazon, Alphabet and Meta are planning to invest more than 100 billion USDs a quarter in artificial intelligence, AI data centers and the accompanying infrastructure in the next 3 years, according to public data and statements.

Currently, the Large Language Models(LLMs) powering the leading chat bots ChatGPT, Gemini and LLAMA are requiring huge amounts of computing power. If suddenly, chat bots start requiring much less energy to produce computing answers, this could decrease suddenly the investments in AI data centers by more than 80 % from current levels, according to Wolfteam Ltd.'s projections and estimates.

 If chat bots become more efficient or Large Language Models' shift from model training to inference, that is AI models start to use their own knowledge to make decisions, instead of relying on training, these both developments could reduce the huge demand for data centers.

Such an even was DeepSeek, the Chinese chat bot LLM which produced answers much more efficiently than the current chat bot LLMs.

For now, however with the current structure of LLMs, the need for computing power is bound to continue to grow and thus drive hundreds of billions of USDs investments a year in AI infrastructure.

One way, the system could fall apart is if the companies building out the AI infrastructure become too leveraged or indebted and crumble under their own debt burden. For now, such a scenario seems 3-5 years distant, according to Wolfteam Ltd.'s projections and estimates. 

 

Private Equity Firms Control 700 Billion USD In Life Insurance Assets

 

The largest Wall Street private equity firms like Blackstone, KKR, Carlyle, Apollo, Arres, CVC etc. now control 700 billion USDs in life insurance assets. The Wall Street take over of large part of the life insurance business, makes life insurance assets interwoven in the global financial markets fabric.

Life insurance companies in search of higher yielding assets often invest not a negligible part of their portfolios in Collateralized Loan Obligations, CLOs the underlying loans of which have been disbursed to higher risk borrowers in technology and other sectors often commanding interest rates of more than 10 %, according to Wolfteam Ltd.'s projections and estimates.

Many of these CLOs are also bought by the private equity arms of Blackstone, KKR, Carlyle, Apollo, Arres, CVC etc., which also on the other side disburse high yielding loans to risky borrowers in technology and other sectors thus commanding high interest rates of more than 10 %.

This kind of investments benefit the economy by supporting the technology companies which develop the AI infrastructure and thus drive the US GDP growth lately. The last figures show that large percentile of the US GDP growth is due to artificial intelligence, AI related investments.

On the other hand, however insurance being interwoven in the fabric of the economy means problems in one corner of the market or company could quickly spread and bring about a worldwide recession.

For now, however  the largest Wall Street private equity firms like Blackstone, KKR, Carlyle, Apollo, Arres, CVC etc. investments seem to be paying off by yielding high rates of return, which are plowed back to the pension funds and endowments which provide large part of the privater equity firms' assets under management.