StepStone Group | 2026 investment outlook: Private Equity and Venture Capital

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[StepStone Group 2026 investment outlook: Private Equity and Venture Capital

Alpine SPRING Private Venture & Growth Fund Alpine SPRIMTM Private Markets Fund]

[Featuring Brett Schlemovitz, Partner StepStone Group]

Hi. Good morning, everybody. I'm Brett Schlemovitz, one of the partners in the New York office of StepStone. Overall, the 2026 outlook for private equity is optimistic. The macro backdrop is supportive. Deal and exit activity are expected to pick up in 2026, and structural trends like AI adoption and broader investor participation could fuel a new phase of growth.

We continue to believe that there's opportunity to buy high-quality private companies that are growing faster than their public counterparts. On the venture capital side, we think this is a very interesting time to invest. We continue to find ourselves in the midst of a unique inflection point in the innovation cycle. In this instance, largely around AI. Venture capital investors are extremely excited about the opportunity to put money to work in AI native businesses, as well as companies using novel technologies to enhance operational efficiency and productization.

On the private equity side, we think deal activity will continue to rebound from what we've even seen in Q4 of this year or further into 2026. In the United States alone, we think private equity deal volume is projected to grow around 5%. There's definitely optimism around large transformational deals, particularly in sectors like technology, life sciences, financial services, a lot of these are being driven by AI enabled growth. In addition to that, there's very strong momentum in the secondaries market, which we think will continue to create deal flow for us going forward.

A lot of that increase volume is coming from these GP-led continuation vehicles, but also the LP-led deals are continuing to grow in size every year as more and more groups use the secondary market to tactically optimize their portfolios. There are a couple of areas where we think we'll largely be investing over the next year or two.

The first is consumer essentials and services, whether that be pet care, health and wellness, home services and more recession resilient consumer platforms. Second is reshoring and supply chain management. The third is manufacturing and industrials. Four would be logistics and specialty distribution. And then lastly here, health care. Overall, we think that there's a plethora of high-quality private companies we can continue to invest in operationally improve and sell at a profit down the road.

As I mentioned earlier, we think now is one of the most interesting times we've seen in decades to be investing into venture capital. There are a number of key themes where we think we'll be investing over the next year or two. The first is artificial intelligence and machine learning, whether that's vertical AI or generative AI. The second is deep tech, which could be quantum computing, both for pure research and potential commercial applications, robotics and advanced manufacturing.

As many people are familiar with companies like SpaceX, we’re big believers and in space tech and defence technology. Number three, health tech and biotech. This could include digital health and telemedicine, personalized medicine and genomics. Number four, fintech continues to be a very active area for us. Number five, cybersecurity, unfortunately, continues to be a vastly growing area where there's just more and more of a need, especially in this environment where hackers can use AI to try and infiltrate networks.

And then lastly, defence technology. We just think there are a number of very interesting opportunities to put capital out in a judicious way over the next year or two.

[The information contained in this material are the views of StepStone Group and compiled by CIBC Asset Management Inc., as of December 11, 2025 and are subject to change at any time. CIBC Asset Management Inc. does not undertake any obligation or responsibility to update such opinions. This material is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice, it should not be relied upon in that regard or be considered predictive of any future market performance, nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this material should consult with their advisor.

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