GP Survey Results and Small Buyout Market Trends

As part of our ongoing market diligence, we recently surveyed 51 North American small buyout managers within RCP’s primary funds to assess expectations for exits and liquidity over the next 12 months.

Key Takeaways from Our GP Survey

• Strong exit expectations for 2026: ~80% of surveyed managers expect at least one full sale, and ~50% expect multiple realizations.
• Distributions are trending higher: ~54% of surveyed managers expect distributions to increase meaningfully compared to the prior year.
• Exit channels remain consistent: activity is expected to be concentrated among sponsor-to-sponsor and strategic buyers, while IPOs remain limited.

Overall, these results reinforce our cautious optimism on the liquidity environment. Surveyed managers broadly expect active, multi-company realizations, accelerating distributions, and exits into the well-established universe of sponsor and strategic buyers. In our view, this supports continued capital return potential for North American small buyout investors, and we will continue to monitor how these expectations translate into realized activity over the course of the year.

Notably, this trend is already playing out within our own portfolio: in RCP’s commingled funds (excluding SMAs), distributions through 7/24/26 are up ~156% compared to the same period in 2025 and up ~51% compared to the same period in 2024.

View the Full RCP GP Survey Results

Beyond manager expectations for liquidity, recent PitchBook data continue to highlight the attractive valuation and performance characteristics of the lower middle market.

On valuation, entry multiples remain more attractive in the lower middle market. The median entry multiple for the $500 million to $1 billion total enterprise value (TEV) segment finished 2025 at 13.4x TEV/EBITDA, compared to 8.8x for the $25 million to $100 million TEV segment—a valuation gap of approximately 4.6 turns, up from roughly 3.4 turns in 2023. As a result, the upper middle market increasingly resembles megadeal territory.

On performance, realized results tell a similar story. PitchBook’s realized-deal data since 2009 show the $25 million to $100 million TEV segment generated a pooled 39% gross IRR (gross of fees and carry; net returns to LPs will be lower), outperforming every larger size category while experiencing fewer negative outcomes. In our view, these dynamics underscore the attractiveness of the lower middle market, where value creation is driven primarily by operational improvements, strategic growth initiatives, and disciplined execution.

Consistent with our survey findings, PitchBook data show that sponsor-to-sponsor transactions continue to represent the dominant source of liquidity, while strategic buyer activity remains active and the IPO market remains relatively subdued. This closely mirrors manager expectations, as survey respondents overwhelmingly identified larger sponsors and strategic buyers as the primary expected sources of exits over the coming year.

Read PitchBook’s Q1 2026 U.S. PE Middle Market Report

Taken together, these manager-, deal-, and market-level insights present a constructive outlook for North American small buyout investing, supported by both survey sentiment and realized market performance. That said, elevated rates, dry powder overhang among larger sponsors, and macro uncertainty remain risks that could slow sponsor-to-sponsor deal flow relative to current expectations. We believe the underlying trend remains favorable, though the pace of realizations through the remainder of 2026 and into 2027 will likely depend on how these headwinds evolve.

Past performance does not predict, and is not a guarantee of, future results. Source: RCP Advisors and PitchBook Q1 2026 U.S. PE Middle Market Report. Survey results reflect aggregated responses from 51 U.S. and Canadian small buyout managers collected from 4/23/26 through 5/8/26 and represent respondent expectations as of the survey date. Such expectations are inherently subjective and may not be indicative of future market conditions or outcomes. Targets and/or projections are only estimates of future results based upon assumptions made at the time the projections are developed. There can be no assurance that the projected results are correct or will be obtained, and actual results may vary significantly from the projections. This market commentary and all information contained herein is being provided solely for educational and informational purposes and may not be relied on in any manner as, legal, tax or investment advice or as an offer to sell or a solicitation of an offer to buy an interest in any investment sponsored by RCP or be construed as an offer to sell or a solicitation of an offer to buy any securities or investment products. The information contained in this survey and commentary does not constitute investment advice or an offer or sale of any security or investment product. Offerings are made only pursuant to a private offering memorandum containing important information. Statements are made as of the date of this release, and there is no implication that the information contained herein is correct as of any time subsequent to such date. Some of the statements in this release may constitute “forward-looking statements” within the meaning of the federal securities laws. Any forward-looking statements are inherently subject to a variety of risks and uncertainties that could cause actual results or events to differ materially from those results or events predicted or anticipated by these statements. RCP’s investment strategy is subject to significant risks and there is no guarantee that any fund will achieve comparable results as any prior investments or prior investment funds of RCP. All investments involve risk, including the potential loss of capital. See the Full RCP GP Survey Results for additional information. “Committed capital” primarily reflects the capital commitments associated with our SMAs, focused commingled funds and advisory accounts advised by RCP since the firm’s inception in 2001 (including funds that have since been sold, dissolved, or wound down and certain historical advisory accounts for which RCP’s advisory contracts have expired). We include capital commitments in our calculation of committed capital if (a) we have full discretion over the investment decisions in an account or have responsibility or custody of assets or (b) we do not have full discretion to make investment decisions but play a role in advising the client on asset allocation, performing investment manager due diligence and recommending investments for the client’s portfolio and/or monitoring and reporting on their investments. For our discretionary SMAs and commingled funds, as well as for our non-discretionary advisory accounts for which RCP is responsible for advising on all investments within the client’s portfolio, committed capital is calculated based on aggregate capital commitments to such accounts. For non-discretionary accounts where RCP is responsible for advising only a portion of the client portfolio investments, committed capital is calculated as capital commitments by the client to those underlying investments which were made based on RCP’s recommendation or with respect to which RCP advises the client. Committed capital does not include (i) certain historical non-discretionary advisory accounts no longer under advisement by RCP, (ii) assets managed or advised by the Private Capital Unit, or by the HB Unit which are independent business lines of RCP 2, (iii) capital commitments to funds managed or sponsored by RCP’s affiliated (but independently operated) management companies (including, without limitation, Five Points, TrueBridge, Enhanced, Westech, Qualitas, and Stella), and (iv) RCP’s ancillary products or services.