Private equity confidence climbs in Central Europe - Deloitte survey

Private equity sentiment in Central Europe has entered 2026 with renewed strength.

Deloitte's latest semiannual Private Equity Confidence Survey, which covers Albania, Bulgaria, Croatia, Romania, and Serbia, among others, shows the Central Europe Private Equity Index rising to 135 in December, comfortably above its long-term average of 116 and marking a continued recovery from July, when it stood at 133. The increase reflects growing comfort among investors in navigating persistent geopolitical volatility.

Activity outlook strengthens

A majority of respondents (56%) expect overall market activity to increase in 2026, up sharply from 28% in the previous survey. Only 8% anticipate a decline. This optimism follows solid deal flow in 2024 and 2025, with transaction values edging higher and buyouts recovering toward their five-year average.

At the same time, economic sentiment has improved meaningfully. Nearly half (46%) of respondents expect the economic climate to improve, compared with 24% previously. Just 14% anticipate deterioration. Regional GDP growth forecasts reinforce this view, with Poland expected to maintain growth above broader EU averages.

In short, private equity managers are positioning for expansion, not retrenchment.

Debt is back

Perhaps the most notable shift is in financing conditions.

Fully 51% expect debt availability to increase, up from 41% in the previous survey and representing the third period in a row to record a notable rise. Only 4% foresee liquidity tightening.

Non-bank lenders are playing an increasingly prominent role, alongside traditional banks. The survey highlights both regional structured credit providers and global institutions as active in supporting leveraged transactions. The growing use of euro-denominated lending — even in countries with sovereign currencies — is also helping attract capital.

For dealmakers, this matters. Improving debt conditions typically compresses equity requirements and can support higher transaction volumes.

Competition is concentrated at the top

Investors are not chasing early-stage risk. Competition is intensifying around market leaders, with 61% of respondents expecting the fiercest bidding for established businesses — the third consecutive semester of rising preference for these assets.

Mid-sized growing companies rank second at 31%, while only 8% expect start-ups to attract the highest competition.

This signals a defensive bias within optimism: capital is available, but it is flowing primarily toward businesses with scale, visibility, and proven resilience.

Transaction sizes stable, portfolio focus rising

Despite improving conditions, expectations for average transaction size remain stable. Sixty percent foresee no change, 35% expect increases, and only 6% anticipate contraction.

Meanwhile, investors are allocating more time to portfolio management. The share expecting to focus primarily on new investments has declined to 46%, while 38% anticipate prioritizing portfolio oversight — often a defensive strategy. Fundraising remains steady at 17%.

This suggests firms are balancing expansion with value creation discipline.

Returns outlook improves

Expectations around financial efficiency have strengthened materially.

More than half (53%) expect investment efficiency to improve, up from 41% previously. Only 7% foresee deterioration, unchanged from July.

At the same time, vendor pricing appears to have stabilized. Nearly two-thirds believe pricing held steady in late 2025. Looking ahead, 57% expect valuations to remain stable, while 17% anticipate increases.

Stable pricing combined with improving debt conditions and higher confidence creates a constructive — though not overheated — backdrop.

Resilience as the structural theme

The survey's defining word is resilience.

Half of respondents report that pandemic-era investments performed as expected, with 18% outperforming and a third underperforming. While geopolitical and fiscal uncertainty persists, 61% believe external policy volatility will eventually settle and usher in greater clarity.

Central Europe's private equity market has now operated through multiple cycles, from global financial crises to pandemic disruption and geopolitical tensions. According to Deloitte's long-running barometer, experience is becoming a structural advantage.

The region is not immune to volatility. But its private equity ecosystem appears increasingly comfortable operating within it.