Q2 2026 Lincoln Private Market Index™

The LPMI increased 1.9%, recovering most of its 2.2% decline in Q1. By comparison, S&P 500 enterprise values increased 14.8% during the quarter, which marked its best quarter in the last five years, and when excluding the “Magnificent Seven” from the S&P 500, which are less comparable to private market companies, the enterprise value of public companies increased 15.4%. Enterprise values across both public and private markets were driven by strong earnings, though public markets benefited from significant multiple expansion despite AI-driven uncertainty.

“Q2 marked a return to the LPMI’s long-term pattern: Private company enterprise value growth was driven by operating performance, not multiple expansion,” noted Steve Kaplan, Neubauer Distinguished Service Professor of Entrepreneurship and Finance at the University of Chicago Booth School of Business, who assists and advises Lincoln on the LPMI. “The public market’s much larger gain likely reflected a rapid repricing of future growth expectations across AI infrastructure and adjacent sectors. Private markets did not participate to the same extent, but they also did not experience the same degree of volatility.”

Technology enterprise values partially recovered in Q2 as AI-related concerns softened and operating performance held steady, which supported the prior expectation that the Q1 repricing reflected longer-term disruption risk more than a change in near-term results and outlook. Technology companies continued to lag the broader market, as investors were still wary of the growing risk of AI-driven disruption across traditional software business models and the risk of material capital expenditures on AI without near term ROI.

“Q2 reinforced that adjustments to software valuations are not one size fits all,” noted Ron Kahn, Managing Director and Co-Head of Lincoln International’s Valuations & Opinions Group. “The relevant distinction is not simply vertical versus horizontal. It is whether a company has a durable value proposition, recurring customer demand and a capital structure that can absorb volatility. Lower-LTV software credits remained well protected, while weaker and more highly levered businesses continued to be marked more selectively.”

Energy companies led enterprise value growth in Q2 as oil prices remained elevated amid military conflicts in the Middle East, which was compounded by the growing electricity demand from data centers. Subsectors including semiconductors, power and cooling infrastructure, as well as industrial companies tied to data center investments, benefited either directly or indirectly from AI infrastructure spending as the surging power requirements triggered major infrastructure investment needs and utility-scale power agreements.

The gray line in Graph 3 indicates the quarterly change in LPMI enterprise values, which is based on changes in performance (e.g., EBITDA), combined with the change in EBITDA multiples.

After a rare loss in enterprise value in Q1, the LPMI reverted to exhibiting growth in Q2. Continued momentum in earnings across all sectors more than overpowered investors’ concerns and the resulting valuation multiple contraction. While the broader S&P 500 was also primarily driven by improved earnings, public market enterprise values were further impacted by higher valuation multiples.

The percentage of private companies reporting year-over-year revenue growth increased to 70.7% from 69.6% in Q1, while the percentage reporting EBITDA growth rose to 64.0% from 62.4%. The magnitude of growth also accelerated to 6.9% from 6.5% for revenue and to 5.6% from 4.7% for EBITDA. For context, the 6.9% revenue growth rate was well above the 3.5% year-over-year increase in the Consumer Price Index (CPI), suggesting that aggregate top-line growth was not solely attributable to price inflation.

Similar to prior quarters, all size categories tracked by the LPMI moved in alignment with negligible variability by size.

While enterprise values increased for all size cohorts, smaller companies (i.e., companies with EBITDA < $20 million) experienced a lesser increase than their larger counterparts, as larger companies have been broadly able to handle inflationary pressures and have been insulated to a greater extent from various broader market headwinds. Conversely, investor demand has risen for smaller businesses given the potential for opportunistic valuations despite the inherent greater risk for smaller businesses as market participants facing deployment pressures look down-market for platform businesses. The shift in focus continues to be driven by heightened competition and the empirical trend of add-on opportunities remaining constructive and stable while also buying down entry multiples on existing platforms.

Source of Data and Sample Size

On a quarterly basis, Lincoln determines the enterprise fair value of over 7,400 portfolio companies for over 250 sponsors (i.e., private equity groups and lenders to private equity groups). These portfolio companies report quarterly financial results to the sponsor or lender. Lincoln obtains this information and determines the appropriate enterprise value multiple so as to compute the enterprise value in accordance with the fair value measurement principles of generally accepted accounting principles. In assessing enterprise value, Lincoln relies on well accepted valuation methodologies such as the market approach and income approach considering each company’s historical and projected performance and other qualitative and quantitative factors. Finally, each valuation is then vetted by auditors, company management, boards of directors and regulators. Upon concluding each quarterly valuation cycle, Lincoln aggregates the underlying financial performance and enterprise value data for analysis.

To construct the LPMI, Lincoln selects a subsection of the companies valued each quarter, including private companies each generating earnings before interest, taxes, depreciation and amortization of less than $250.0 million, disregarding venture-stage businesses and non-operating entities, such as special purpose entities that own real estate and specialty finance assets.

For more information, visit the Private Market Indices page.

Academic Advisors

Professor Steven Kaplan is a Senior Advisor to Lincoln’s Valuations and Opinions Group. He is the Neubauer Family Distinguished Service Professor of Entrepreneurship and Finance and Kessenich E.P. Faculty Director at the Polsky Center for Entrepreneurship and Innovation at the University of Chicago Booth School of Business. Among other courses, Professor Kaplan teaches advanced Master of Business Administration and executive courses in entrepreneurial finance and private equity, corporate finance, corporate governance and wealth management. Professor Kaplan conducts research on a wide array of issues in private equity, venture capital, corporate governance, boards of directors, mergers and acquisitions and corporate finance. He has been a member of the Chicago Booth faculty since 1988.

Professor Kaplan serves on the board of Morningstar and several fund and company advisory boards. He is also a Research Associate at the National Bureau of Economic Research.

Professor Kaplan received a Bachelor of Arts, summa cum laude, in applied mathematics and economics from Harvard College and earned a Doctor of Philosophy in business economics from Harvard University.

Professor Michael Minnis is a Senior Advisor to Lincoln’s Valuations and Opinions Group. He is the Deputy Dean for Faculty and Fuji Bank and Heller Professor of Accounting at the University of Chicago Booth School of Business, where he researches the role of accounting information in allocating investment efficiently by both managers and capital providers. His recent research focuses on understanding the role of privately held companies in the U.S. economy and how these firms use financial reporting to access, deploy and manage capital. He particularly enjoys identifying unique data and methods to empirically examine issues in a novel way.

In January 2018, Professor Minnis became a member of the Private Company Council, the primary advisory council to the Financial Accounting Standards Board (FASB) on private company issues. Professor Minnis received his Ph.D. from the University of Michigan and his B.S. from the University of Illinois, where he graduated with Highest Honors.

Independent Academic Validation of Lincoln’s Data

In January 2024, an Assistant Professor of Finance at Penn State University’s Smeal College of Business conducted a study to evaluate the statistical significance of Lincoln’s private market Database as compared to other independent sources, like Pitchbook, BDC Collateral, and Preqin. The test was akin to an FDA pharmaceutical drug effectiveness test wherein Lincoln’s data was tested in relation to the independent data sets, measuring overlap of deals detailed and congruency of reported terms. The results were robust and concluded that Lincoln’s data was representative of the private debt universe, and comprehensive of sponsor backed deals, in particular. Lincoln’s Database featured 53% of reported private debt deals with terms in Pitchbook and 48% of sponsor backed deals with reported debt terms that appeared in BDC Collateral. However, beyond the abundance of pure deals, Lincoln’s database goes a step beyond and includes vital operating performance figures from the portfolio company level that the other databases don’t feature. Lincoln’s data is more comprehensive, inclusive of enterprise value and financial performance metrics that allow for a much clearer picture of the state of the private markets.

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Lincoln International’s Valuations & Opinions Group (VOG) is a leading independent valuation advisor to managers of illiquid assets and lenders to alternative assets funds. VOG specializes in the valuation of illiquid debt, equity and derivative securities. Additionally, they provide independent fairness, solvency and other transaction opinions for a variety of corporate transactions for both public and private companies.

VOG is widely recognized for leveraging Lincoln International’s “real-world” transaction experience from its M&A and capital advisory practices to assist its clients in the determination of fair value. Lincoln International’s highly skilled professionals have extensive experience in determining and supporting fair value measurements for traditional and complex securities.

Important Disclosure

The Lincoln Private Market Index is an informational indicator only and does not constitute investment advice or an offer to sell or a solicitation to buy any security. It is not possible to directly invest in the Lincoln Private Market Index. Some of the statements above contain opinions based upon certain assumptions regarding the data used to create the Lincoln Private Market Index, and these opinions and assumptions may prove incorrect. Actual results could vary materially from those implied or expressed in such statements for any reason. The Lincoln Private Market Index has been created on the basis of information provided by third-party sources that are believed to be reliable, but Lincoln International has not conducted an independent verification of such information. Lincoln International makes no warranty or representation as to the accuracy or completeness of such third-party information.