Name: Interim Leadership Outpaced Q3 2025
Creator: BluWave
License: https://bluwave.net/insights-report/2026/q2/report#methodology

Foreword

Q3's focus was value creation.

Nobody lists a house in a storm. You wait for a stretch of clear weather, and while you wait, you fix the place up.

That’s exactly what private equity did in Q3 2026. Value creation held at 84% of all BluWave project activity, matching Q2’s record, while due diligence stayed at 16%, down from 30% in Q3 2025.

Bringing a company to market takes about six months of calm. Twice, the deal market started to build momentum, and twice a new storm rolled in: geopolitical shocks and policy uncertainty in 2025, then again this year. Each one reset the six-month clock.

Your peers spent the quarter on three things:

They strengthened their teams. Interim Leadership was the #1 value creation resource, up 44% year over year (YoY).
They put AI to work. AI Advisory demand grew 175% YoY, and half of those projects named a specific workflow.
They went after margins. Operations Performance & Improvement rose 33% YoY, and our Private Equity Priority (PEP) Index tipped toward projects favoring profitability.

Anyone who has sold a house knows the rule: buyers pay for good bones and pay a premium for a great kitchen. Exits follow the same rule. Margin gets you to the table. The growth story sets the multiple.

Storms always pass. Private equity’s best days are ahead. Many holds have reached years five to seven, so when the weather clears, the For Sale signs will go up in droves. The houses that got the work done in advance will sell first and sell for more. The PE firms in these pages are doing that work right now.

The weather will clear. From this report, pick a move you have been putting off and start it now.

Onward,

Sean Mooney
Founder & CEO, BluWave

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.

Q3 update

Accelerating, and moving beyond tech. AI Advisory demand grew 175% year over year (YoY) in Q3 2026, strongest in healthcare services, residential services, industrials, and manufacturing. The growth came almost entirely from outside the tech sector. AI now lives in businesses that never called themselves tech companies.

How to play to win

Start with an AI assessment and roadmap from BluWave advisors that ranks use cases by payback, so the first project funds the second.
Put cost takeout on the AI scorecard. Track hours removed and errors avoided, not tool adoption, so the gains show up in EBITDA before exit.

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.

Q3 update

Tracking, and the cost of a wrong pick is showing up. System Selection & Implementation demand grew 114% YoY, and half of those projects fixed or optimized systems portfolio companies already had. IT & Software Strategy rose 86% YoY. Infrastructure decides whether AI works.

How to play to win

Use BluWave system selection advisors to map requirements across the full stack before buying, and bring implementation specialists in early so the platform you choose gets adopted.
If a recent implementation stalled, fix it before replacing it. An optimization project can recover value faster than starting a new selection cycle.

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.

Q3 update

Running hot, but so are costs. Manufacturing stayed firmly in expansion, and Q3 growth estimates ran strong. Inflation above 3% and a September rate hike raised the cost of doing business, but demand held. The economy is doing its part. Margin discipline decides who turns that demand into EBITDA.

How to play to win

Protect margin while demand holds. BluWave procurement and supply chain advisors find savings in spend and suppliers that hold up no matter where rates go next.
Price for the economy you have. With inflation above 3%, revisit pricing and cost-to-serve now instead of waiting for rates to come down.

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.

Q3 update

Delayed, not derailed. Deal flow was there, but fewer processes got far enough to spend diligence dollars. Diligence held at 16% of BluWave activity in Q3 2026, down from 30% in Q3 2025. Aging assets still need an exit, and every quarter of delay adds pressure to sell.

How to play to win

Scope diligence in phases. Configure your scopes of work to phase gate as you gain conviction. Add AI diligence to your work streams to help understand core future risks and opportunities.
Prepare exits the way a buyer will judge them. Commission a sell-side quality of earnings and bring in an interim CFO to run the data room, so diligence moves faster.

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.

Q3 update

Tracking, and the dividing line is data. BI & Analytics demand rose 133% YoY, and most projects centered on consolidating data across acquired businesses. The movers bring a specific use case and clean data. The laggards are still experimenting, and the gap compounds every quarter.

How to play to win

Run AI across the portfolio, with company by company use cases. BluWave AI implementation specialists can take one proven use case and repeat it across similar holdings.
Healthcare services and industrials led both AI and data demand this quarter. Treat sector adoption as a deadline: the faster a sector moves, the sooner data readiness shows up in exit value.

Profitability is back in charge. The BluWave Private Equity Priority (PEP) Index, which reads positive when the overall BluWave project mix is geared toward growth projects and negative when it tilts toward profitability, fell from +0.06 to −0.06 in Q3 2026.

Profitability readings used to be rare and shallow, though over the last five quarters three have pivoted toward profitability. With exits near, PE firms focused on margin, because growth projects take longer to show up in the numbers a buyer will value.

Q3 2026 Quarterly Overview

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:

Human Capital activity grows as hold periods elongate. Human Capital grew to 36% of all activity, up from 31% in Q3 2025, driven by interim and mid-level talent while permanent recruiting held flat.
AI activity becomes a must-do in private equity. Technology grew 93% YoY across all activity, the fastest of any functional area.

PE kept testing deals but funded fewer full studies.

Diligence held at 16% of all BluWave activity in Q3 2026 for a second straight quarter, down from 30% in Q3 2025. Fewer processes got there, and those that did moved fast.

The BluWave Activity Index – Due DiligenceQuarterly breakdown by functional area

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

PE firms topgraded teams and accelerated AI implementations.

Value creation made up 84% of BluWave activity in Q3 2026. With exits pushed out, PE firms invested in the two things that move a valuation: who runs the company and the systems and AI it runs on.

The BluWave Activity Index – Value CreationQuarterly breakdown by functional area

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

Featured Customer Story

Client: Portfolio company | Industry: Automotive | Service: ERP Implementation & BI

An automotive company trades spreadsheet reporting for a live data foundation built for AI

A multi-location, PE-backed automotive company ran on an ERP with limited reporting. Staff spent more than a day each week building critical reports by hand in Excel, so finance and sales checked numbers instead of acting on them. BluWave connected the company with a data and automation firm experienced in ERP integration and BI reporting.

The firm built a live ERP connection that refreshes sales reporting every hour and Power BI dashboards that replaced the spreadsheets. Within 6 months, the new setup supported 3 functional teams, up from 1, and the company completed step one of its AI readiness roadmap.

READ THE CASE STUDY →

Featured Customer Story

Client: Portfolio company | Industry: Healthcare | Service: Supply Chain Advisory

An automated warehouse stuck at half its planned throughput gains 12% efficiency for under $250K

A high-growth healthcare fulfillment company invested heavily in warehouse automation, but one distribution center trailed its peers and a newly automated site stalled at about half its planned throughput. The company needed an independent read on what was an operations problem and what was a technology limit. BluWave connected it with a supply chain and fulfillment consulting firm experienced in diagnosing automated distribution.

The firm tuned slotting, order allocation, and robot tasks, producing a 12% efficiency gain for under $250K in capital, and identified another 25% in robot capacity without major platform changes. A 3-year roadmap now directs future automation spend toward the highest-return investments.

READ THE CASE STUDY →

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

Delaney Grace WalkerMarketing Operations Manager

Expert insight from

Sean MooneyFounder + CEO

Brian GrantVice President, Marketing

Keenan KolinskyVice President, Market Network

Scott BellingerVice President, Revenue

BluWave Private Equity Insights Report

Q3's focus was value creation.

Market Moving Trends

Private equity extended its holds again and invested in its portfolio.

Deals kept starting, but fewer made it to full diligence.

PE firms installed interim leaders and cut costs ahead of exits.

AI is 2026’s defining value creation lever, powered by the data beneath it.

PE Built Value Through the Hold

2026 Predictions

Prediction

Q3 update

How to play to win

Prediction

Q3 update

How to play to win

Prediction

Q3 update

How to play to win

Prediction

Q3 update

How to play to win

Prediction

Q3 update

How to play to win

Margin Moves to the Front

PE firms focused on the companies they already own

Q3 2026 Quarterly Overview

How PE teams allocated resources:

PE kept testing deals but funded fewer full studies.

PE firms topgraded teams and accelerated AI implementations.

Ready to see what your peers built?

How Private Equity Takes Action

Additional BluWave Insights

How Do PE Firms Source Commercial Diligence Resources on a Tight Deal Timeline?

Which Platforms Help PE Firms Find Interim Executives Faster than Search Firms?

How to Choose a BI and Analytics Provider for a PE Portfolio Company

Trusted by Hundreds of PE Firms

White Glove Experience

BluWave Vetted™ Network

Moving at the Speed of PE

Proprietary Matchmaking

Data Methodology, Disclaimer & Closure

Data Methodology

Disclosures

Report created by

Expert insight from

Download the Q3 2026 Private Equity Insights Report