Every year Bain publishes its Global Private Equity Report, and most years it reads like a weather report. The 2026 edition reads like a warning. Right in the middle of it, in a chapter called “Welcome to a New Era,” Bain wrote down the thesis I've been pitching for months: 12 is the new 5.
Here's what that means, why it lands hardest on lean teams, and what I think you should do about it.
The new deal math
In a typical 2015 buyout, you borrowed half the purchase price at 6 to 7 percent, multiples were climbing on their own, and a deal needed roughly 5 percent annual EBITDA growth to deliver a 2.5x return over a five-year hold. The market did half the work for you. By Bain's own numbers, low rates and rising multiples powered over 50 percent of all buyout returns in that era.
Today borrowing costs sit at 8 to 9 percent, leverage is down to 30 to 40 percent of purchase price, and almost 80 percent of GPs expect multiples to stay flat. Same entry prices, same return target, and the deal now needs 10 to 12 percent annual EBITDA growth to pencil. The operational performance required from every single deal roughly doubled.
Bain's words, not mine: “Relying on the same old, same old has never been riskier.”
The squeeze on the other side
If the report stopped there, it would just be a hard year. It doesn't stop there.
The cost of generating alpha is rising at the same time the revenue that pays for it is shrinking. The average buyout management fee hit 1.6 percent in 2025, down 20 percent from the traditional 2. LPs are taking no-fee coinvestment at a median of 33 cents per dollar of fee-bearing capital, which Bain calculates as another 25 percent cut to firm revenue. And the list of table-stakes capabilities got longer: digital, tech, and AI now sit on Bain's chart right next to sourcing and structuring.
Behind all of it, the industry is sitting on 32,000 unsold companies worth $3.8 trillion, holding periods have drifted to seven years, and distributions have been stuck below 15 percent of NAV for four straight years. LPs are choosier than they've ever been, and they're asking every firm the same question: what exactly is your repeatable edge?
More performance demanded from every deal. Less revenue per dollar of AUM to fund the machine that delivers it. That's the squeeze, and it lands hardest on lean teams.
Full potential diligence
Bain's prescription is the part I find most interesting. Diligence as most firms practice it is defensive: confirm what's in the CIM, build a model conservative enough for the lender and aggressive enough for the IC. When 12 is the new 5, Bain says that's no longer enough. Their answer is what they call full potential diligence: commercial, operational, technical, AI, and digital workstreams run as one unified inquiry, executed before signing, with a value creation plan ready for day one of ownership.
That's exactly the process Hg ran on its $6.4 billion take-private of OneStream Software in January. Commercial, technical, product, AI, and go-to-market diligence in a single integrated effort, each team's findings feeding the others, built up over months of increasing access. By the time Hg bid, it knew more about what the asset could be worth than anyone else at the table.
Here's the catch. When Bain delivers that work, it runs $2 million to $5 million per engagement. Hg can pay that on a $6.4 billion deal. A lean middle-market firm can't, and certainly not on every deal in the pipeline. The new standard for diligence is being set by firms with resources most of the market doesn't have.
Making the new standard affordable
This is the problem I've spent the last few months building against.
Antonine runs on Palantir Foundry, the same ontology-backed agentic infrastructure Palantir deploys in defense and intelligence, pointed at investment cognition. Document in, decision out. DealFilter screens inbound teasers against what your firm actually buys, before an NDA is signed. Diligence ingests the full deal package and drafts the IC memo in your format, every figure cited to source. The Vault holds everything your firm has ever decided, so each new deal lands already cross-referenced against your own history. Pipeline gives you one view of where everything stands.
The point isn't to replace judgment. It's that the document grind stops eating the team's week, so a four-person deal team can run the kind of unified, full-potential inquiry Bain describes without the seven-figure invoice. The bar doubled. Your headcount doesn't have to.
If the math is keeping you up
If you run an investment firm and the new deal math is on your mind, take five minutes for the AI Readiness questionnaire on this site. I read every submission personally and respond with a written plan for what it would take to bring your firm to the new standard. No deck, no drip campaign. A plan.
Bain says the winning firms will build systems, not slogans. I'd start now. The bar isn't coming back down.
Zach