Lincoln Index Shows Private Markets Up 2.8% in Q3 2026
Private company valuations rose for the quarter, but elevated interest rates and isolated credit stress are creating sharper divides across private markets.
Private company valuations climbed 2.8% in the third quarter of 2026, according to the Lincoln Private Market Index, as earnings growth continued to support deal activity even amid a more cautious credit environment, Chicago-based investment banking advisory firm Lincoln International reported Monday.
The quarterly gain reflects sustained operational performance among privately held companies, though Lincoln's analysis flagged that higher borrowing costs are beginning to expose vulnerabilities in select pockets of the private markets landscape. The firm noted increasing differentiation — meaning the gap between stronger and weaker performers is widening — as a defining characteristic of the current cycle.
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Credit risks surfacing within private markets represent a notable shift from the broadly favorable conditions that characterized earlier periods of low-rate financing. Elevated rates have pressured debt-service obligations for some borrowers, heightening scrutiny on leverage levels and covenant structures across private credit portfolios.
The persistence of earnings growth, however, has provided a counterweight, lending support to valuations and suggesting that fundamentals remain intact for well-positioned companies. Lincoln's findings underscore that selectivity is becoming increasingly critical for investors deploying capital in private equity and private credit strategies.
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