Exit readiness rises on the PE agenda as firms focus on early systematic preparation, alignment with management and AI strategy

• Exit readiness is becoming a continuous strategic discipline, with 86% of GPs saying preparation improves valuations, especially when started 12 to 24 months before sale
• Strong PE-management alignment on a clear, data-backed equity story and rigorous management is critical to unlock value and execution certainty between GPs and management teams in improving execution and value realization
• AI is emerging as a key exit differentiator, with more than double the number of firms now identifying it as a key consideration in sale preparation

Private equity firms are sharpening their focus on exit readiness as market conditions continue to constrain liquidity and increase pressure on valuations and timing. This is according to the Global PE Exit Readiness Study 2026, which highlights how early preparation, strong GP-management alignment and a clear approach to AI are shaping exit outcomes.

Despite solid underlying performance across many portfolio companies, geopolitical shocks, volatile equity markets and the interest rate environment are making exits more complex and less predictable. Distribution levels remain below historical norms, with around 15% of net asset value returned to investors, compared to a typical 20% to 25%, and a growing share of assets held for longer periods.

Early preparation and PE-management alignment drive stronger outcomes

In response, firms are shifting away from treating exits as a late-stage event and instead embedding readiness across the hold period. Early preparation is proving critical, with 86% of GPs reporting improved valuations and the strongest outcomes seen when preparation begins 12 to 24 months ahead of sale.

Konstanze Nardi, EY Global Exit Readiness Leader, says:

“Exit readiness is a value lever, not a timing decision. Firms that treat it as a continuous, disciplined process across the hold period are the ones that can act with confidence when exit windows open, protect value in pressured markets and create competitive tension in the process.”

The study also highlights the importance of alignment between sponsors and management teams. Eighty-two percent of GPs and 70% of management teams say they are mostly or fully aligned on key exit considerations such as timing, valuation expectations and buyer strategy.

However, management teams express a need for greater support in preparing to address bidder challenges by crafting a clear, defensible equity story backed by robust data.  Further, evidencing value creation initiatives in exit EBITDA continues to be the most significant challenge, underlining the importance of robust data.

AI is emerging as an increasingly important part of exit preparation. The proportion of GPs identifying AI as a significant challenge has more than doubled, reflecting its growing role in how buyers assess both risk and upside. Buyers are focusing not just on AI activity, but on whether companies have a credible strategy supported by strong data and a clear path to future value creation.

Ivan Lehon, EY Global Private Equity Leader, says:

“In an exit market where windows can be brief and buyer scrutiny is intense; readiness becomes a real source of advantage. Firms that align early with management to prove sustainable value creation in the business and the numbers and articulate a comprehensive and credible AI strategy will be best positioned to convert strong performance into realized returns.”

As exit conditions will continue to fluctuate, the study points to a clear shift across the industry. Firms that prepare early, align closely with management teams and build a credible, data-backed and AI-informed investment case will be better placed to convert performance into realized value.

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