Name: AI Advisory Spikes in Q2 2026
Creator: BluWave
License: https://bluwave.net/insights-report/2026/q2/report#methodology

Foreword

The best PE firms did not wait.

If you spent Q2 waiting for the deal market to come back, you were not alone. A second quarter of geopolitical shocks kept processes on pause, and due diligence fell to 16% of all project activity, the lowest share we have ever recorded.

Here is what the headlines miss: the best PE firms did not wait.

Value creation reached 84% of activity, making Q2 the most portfolio-weighted quarter in our dataset. Your peers went to work inside their companies.

AI advisory demand grew 193% year over year and is now reaching the services and industrial businesses that once assumed they were insulated.

Interim leadership demand rose 42% as sponsors put proven operators into seats they cannot leave empty, with EBITDA on the line and exits pushed out.

One more signal deserves your attention. Our Private Equity Priority (PEP) Index crossed back into growth territory for the first time since the disruption began. Quietly, PE firm by PE firm, the market is positioning for the turn.

Which brings us to the question: while the market was stalled, what did you build?

The PE firms in these pages have an answer. Make sure you do too.

Onward,

Sean Mooney
Founder & CEO, BluWave

PE is looking to the future and frustrated by the present.

Private equity firms are doing everything within their control to be ready the moment the deal market returns.

Global crises stalled the deal market for a second consecutive quarter.

The Iran conflict carried through Q2, and diligence fell to 16% of all BluWave activity, the lowest share on record.

With extended holds, PE firms went to work inside their portfolios.

Value creation hit 84% of all project activity, the most portfolio-weighted quarter in the BluWave dataset.

AI is no longer optional. It's operational. And it is in every sector.

AI advisory demand grew 193% year over year, reaching services, businesses, and industrial manufacturers once assumed insulated.

AI moves from buzzword to tactic

Prediction

AI will stop being treated as a strategy unto itself and become a tactical force embedded directly into everyday business workflows.

Q2 update

This is the biggest trend in private equity right now. In Q2 2026, PE firms ran hard toward AI, growing 193% YoY. They've moved past evaluation and are activating AI strategies across their organizations as fast as they can. Speed is table stakes. Precision is the differentiator.

How to play to win

Re-evaluate every function through the lens of force multiplication. Use a PE-grade BluWave AI tools and services resource to assess opportunities and enable purposeful AI adoption versus endless internal pilots.
Call BluWave to connect with AI advisory experts, AI implementation specialists, and vetted, PE-grade, AI-powered finance and accounting software.

Software choice explodes and creates decision paralysis

Prediction

AI is exploding the number of software options across every business function. The PE firms making intentional, connected software decisions now will compound their advantage; the ones that don't will spend years unwinding suboptimal tech stacks.

Q2 update

Tracking and intensifying. New AI software tools are entering the market daily, creating real decision fatigue for PE-backed companies. Too much choice is now its own risk. The PE firms and portfolio companies winning are the ones making deliberate, connected decisions for each company's specific needs.

How to play to win

Contact BluWave for vetted AI software platforms that are matched to your specific stack, scale, and situation.
Default to single-year contracts wherever possible to preserve flexibility. Modular stacks are proving their worth as the landscape continues to shift under PE firms' feet.

The U.S. economy heats up

Prediction

After years of uneven growth, the U.S. economy is positioned to heat up meaningfully. Conditions are improving to create stronger tailwinds for businesses than most have experienced in years.

Q2 update

The underlying economy is in better shape than the anxiety suggests. The job market remains strong, S&P PMI signals expansion, and consumer sentiment is bouncing back. A good-enough-to-getting-better economy is still on track. It just needs the noise to clear.

How to play to win

Don't abandon a growth posture. Use sales force effectiveness groups and specialized recruiters from BluWave to stay positioned while maintaining momentum.
Use the deal market pause to make portfolio companies operationally ready for a demand upswing. Performance improvement and pricing work done now converts first when growth arrives.

Private equity deal market continues its meaningful rebound

Prediction

The structural forces driving a PE deal rebound remain in place for 2026. Aging assets, LP demands, and over one trillion dollars in dry powder point toward accelerating deal volume. Assertive buyers will win.

Q2 update

Geopolitical conflict kept the deal market in limbo throughout Q2 2026. But it remains a pause, not a collapse. Dry powder is still abundant, LP pressure is intensifying, and aging hold periods are creating a forcing function that does not care about macro noise. Sponsors do not have the luxury of waiting indefinitely.

How to play to win

Use BluWave Vetted™ commercial due diligence service providers who move quickly and provide alpha-inducing insights.
When deal certainty is low, lean on senior advisors. BluWave's extensive network spans every industry and niche, providing the perspective and expertise to inform conviction before you commit.

Businesses will bifurcate into winners and laggards

Prediction

Performance gaps will widen sharply in 2026 as AI adoption separates decisive movers from those still evaluating. Companies that hesitate will fall behind before they realize it.

Q2 update

The divide is no longer theoretical and it is no longer limited to tech companies. Traditional services businesses and industrial manufacturers, sectors that once assumed they were insulated, are now among the most active adopters. The groundswell has reached every corner of the market.

How to play to win

Data remains the foundation. Connect with AI assessment and enablement groups to identify opportunities and execute. The window is narrowing.
Use BI and data engineering specialists to ensure your infrastructure keeps pace with your AI ambitions. Layer in growth and ops improvement advisors to convert capability into measurable performance.

Q2 2026 Quarterly Overview

PE doubled down on what it could control.

Q2 2026 was the most portfolio-weighted quarter in the BluWave dataset, with value creation reaching 84% of all project activity against 16% for due diligence. The pattern is intentional: PE firms that cannot exit are preparing to, and PE firms that can are building the operational and technological edge that makes the next entry point count.

Value creation share, Q2 2026

Due diligence share, Q2 2026

The BluWave Activity Index – OverallQuarterly breakdown by functional area

Other G&A
Finance
Sales & Marketing
Strategy
Operations
Technology
Human Capital

How PE teams allocated resources:

Deliberate AI activation defined the quarter. AI Advisory grew 193% YoY, and technology grew 65% YoY across all diligence and value creation activity.
Human Capital stayed the largest functional area. Interim leadership surged as PE firms extending holds reached for senior operators without long-term headcount commitments.
Operations concentrated in performance improvement. PE firms preparing for eventual exit tightened margin and stress-tested what remained to be optimized.

Greater conviction on the deals that moved.

Due diligence fell to 16% of total activity, the lowest share on record, as geopolitical disruption kept deal processes paused for another quarter.

The deals that did enter process moved with full conviction: Commercial Due Diligence held the top spot even as volume compressed, and AI Advisory cracked the top five as PE firms began underwriting AI readiness as part of standard deal evaluation.

The BluWave Activity Index – Due DiligenceQuarterly breakdown by functional area

Sales & Marketing
Finance
Other G&A
Technology
Operations
Human Capital
Strategy

PE Built Through the Pause: AI and Performance Improvement Led

With the deal market stalled for another quarter, value creation reached 84% of Q2 2026 activity, and the composition shifted decisively.

The BluWave Activity Index – Value CreationQuarterly breakdown by functional area

Other G&A
Finance
Strategy
Sales & Marketing
Operations
Technology
Human Capital

Technology was the fastest-growing functional area in value creation, up 78% YoY. Deliberate AI activation drove the gain.
Human capital held the largest share at 42%. Interim Leadership was the single most requested value creation resource of the quarter as sponsors installed senior operators without the cost of permanent placement.
The PE firms building now aren't waiting for the deal market. They're planning to arrive at it ready.

A delayed exit is not a pause. It is a deadline. When you cannot sell, you use the extra time in the hold to drive every point of EBITDA before the sale finally comes. The window gets longer. The pressure to perform gets higher.

That pressure lands on the leadership team. You cannot recruit a permanent C-suite executive late in a hold, and you will not leave a seat empty with EBITDA on the line. So sponsors reach for the one move that fits a short, urgent window: interim leadership.

The Finding: PE is Installing Operating Leadership on Demand

Interim leadership demand rose 42% year over year (YoY) in Q2 and hit its highest level in six quarters. It sat flat across all of 2025, then stepped up two quarters running. That is an inflection, not a blip.

The pull broadened across the operating C-suite, well beyond the CFO seat, as sponsors reached for operators who move the number, not for headcount. It also reached the Top Due Diligence chart for Q2 2026 as deal teams sought to place talent ahead of close.

Data Methodology, Disclaimer & Closure

Data Methodology

The BluWave Private Equity Insights Report is derived from analysis of BluWave's proprietary data involving thousands of projects from the private equity industry and its dealmakers across due diligence and value creation as they contact BluWave for their third-party resource needs*. The proprietary data captured in the BluWave Private Equity Insights Report is a market-leading indicator of both dealmaker sentiment and portfolio strategy.

In 2026, BluWave underwent a report & taxonomy standardization effort that may have impacted historical values that have been published in this report. All reported numbers starting with the Q1 2026 Private Equity Insights Report use the newly standardized taxonomy & classification methodology. While the vast majority of what has been reported in the past has not changed, if you have questions about why the current historical numbers differ from previous results, please contact marketing@bluwave.net.

When paired with relevant market trends and data, the BluWave Private Equity Insights Report is a valuable empirical indication of dealmaker historical and future behavior. We also make our own forecasts & predictions based on the data. Additionally, having tracked and publicly reported the data in the BluWave Private Equity Insights Report since Q1 2018, we make historical comparisons and back-test our predictions over time.

*Note that BluWave defines due diligence projects with a PE firm as those that are used to help evaluate a potential investment target before an investment is made and value creation projects as those that are intended to help increase a company's enterprise value after an investment has been made and during the holding period.

Disclosures

This report is provided by BluWave, LP for informational purposes only and does not constitute a recommendation, endorsement, or referral of any service provider, strategy, or course of action. Recipients should consult their own legal, financial, tax, and other professional advisors before taking any action based on the information contained herein. BluWave, LP and its employees, representatives, and affiliates make no warranty, express or implied, as to the accuracy, completeness, or reliability of the information in this report, including any implied warranties of merchantability, fitness for a particular purpose, or non-infringement. All information is provided "as is." In no event shall BluWave, LP or its affiliates be liable for any direct, indirect, incidental, or consequential damages arising out of or in connection with the use of or reliance on this report.

All content and data within the BluWave Insights Report is owned by BluWave, LP and may not be replicated or copied without explicit permission.

Report created by

Leeanna Nelson Director of Content

Chris JohnsonDirector of Creative

Expert insight from

Sean MooneyFounder + CEO

James AylwardChief Technology + Product Officer

Keenan KolinskyVice President, Market Network

Scott BellingerVice President, Revenue

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BluWave Private Equity Insights Report

The best PE firms did not wait.

Market Moving Trends

PE is looking to the future and frustrated by the present.

Global crises stalled the deal market for a second consecutive quarter.

With extended holds, PE firms went to work inside their portfolios.

AI is no longer optional. It's operational. And it is in every sector.

Q2 Activity: PE Leans Into Portfolio Growth

2026 Predictions

Prediction

Q2 update

How to play to win

Prediction

Q2 update

How to play to win

Prediction

Q2 update

How to play to win

Prediction

Q2 update

How to play to win

Prediction

Q2 update

How to play to win

Growth Regains Its Footing

Q2 2026 Quarterly Overview

PE doubled down on what it could control.

How PE teams allocated resources:

Greater conviction on the deals that moved.

PE Built Through the Pause: AI and Performance Improvement Led

The Interim Surge: What a Stalled Deal Market is Doing to the C-Suite

The Finding: PE is Installing Operating Leadership on Demand

Trusted by Hundreds of PE Firms

White Glove Experience

Network Expertise

Moving at the Speed of PE

Proprietary Matchmaking

Data Methodology, Disclaimer & Closure

Data Methodology

Disclosures

Report created by

Expert insight from

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