Slaughter & May leads Europe's M&A firms with $47bn in Q1 2026 deals as global PE buyouts hit $172bn despite AI fears and geopolitical pause
Global private equity (PE) buyouts reached $172bn in the first quarter of 2026 — still above equivalent quarters in 2023 and 2024, but overshadowed by a sharp deceleration in exits and fundraising. PE exit values fell to $162bn in Q1, down one-third from the prior quarter, returning to Q1 2025 levels, while PE funds globally raised only $86bn, just below Q1 2025 and consistent with PitchBook's finding that 2025 was the sector's weakest fundraising year since 2018. In Europe, Slaughter & May led the M&A adviser rankings for Q1 2026 with $47bn in deals, with Italian firm Gianni & Origoni and Switzerland's Lenz & Staehelin also recording strong performances despite broader market turbulence. The rankings reflect a pattern of fewer but larger transactions, with megadeal activity concentrating advisory mandates among elite firms. Charles Hayes, co-head of private capital at Freshfields, described a market that started the year positively before the escalation of the Middle East conflict injected caution. Some PE houses have paused both exit processes and new investments while assessing the duration of the conflict. Hayes characterised the current environment as one of "enormous latent capacity" — deal pipelines are built but deployment is stalled pending geopolitical clarity. The buyout sector has faced structural headwinds since 2022, when the end of a decade of low interest rates (which allowed PE firms to borrow cheaply to fund acquisitions) raised the cost of leveraged buyouts and simultaneously compressed exit multiples, trapping assets in portfolios and reducing distributions to investors — a dynamic known as the 'denominator effect' on LP (limited partner, i.e. investor in PE funds) allocations.
Why this matters
Suppressed PE exit volumes mean law firms are advising on fewer completed transactions even as deal pipelines remain full — creating sustained demand for preparation work (SPA negotiation, regulatory filing, debt structuring) that may not convert to completions. The gap between buyout activity ($172bn) and exit activity ($162bn, still falling) signals continued portfolio overhang, which drives secondary transaction advisory, GP-led continuation fund structuring, and NAV (net asset value) lending mandates. The 'why now' trigger is dual: the Iran conflict has introduced fresh geopolitical risk premium just as the market was beginning to normalise post-rate-shock, and AI-sector valuation uncertainty is complicating pricing in tech-heavy portfolios. Slaughter & May's ranking leadership reflects the value placed on deep corporate and regulatory expertise in a market where deal certainty — not just deal speed — is the differentiator. Freshfields' named involvement confirms Magic Circle firms remain central to the largest European mandates.
On the Ground
On a stalled exit or buyside mandate, a trainee would maintain and update the conditions precedent (CP) checklist — tracking which regulatory clearances remain outstanding and flagging any jurisdictions where the Iran conflict has triggered new filing requirements. You would also assist with indexing due diligence reports and maintaining the completion bible as deal timetables slip and document versions accumulate.
Interview prep
Question you might get
“If a PE-backed portfolio company is ready for exit but the sponsor has paused the process due to geopolitical uncertainty, what legal mechanisms exist to manage investor expectations and preserve optionality in the meantime?”
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