The distributions drought: what the DPI data shows in 2026

The distributions drought is the four-year period in which private equity funds returned cash to investors at the slowest rate relative to their net asset value since the global financial crisis. Bain's Global Private Equity Report 2026 put distributions at 14% of NAV for the twelve months to the third quarter of 2025, a level last seen in 2008 to 2009, and recorded the ratio below 15% for a fourth consecutive year. The data for 2026 shows exits recovering and secondary volumes at records, but distribution yields remain well under half their long-run average. For a family office the drought has turned private equity from a source of cash into a consumer of it.

What the data shows

Bain's Global Private Equity Report 2026 describes the four years under 15% as an industry record and finds that every vintage from 2017 to 2021 has underdelivered on DPI against the historical benchmark, which Bain takes as the average median DPI of 2010 to 2017 vintages. Average holding periods have lengthened to around seven years from five to six for 2010 to 2021 deals, and the unsold inventory stands at roughly 32,000 companies worth $3.8tn.

Jefferies' Global Secondary Market Review of July 2026 measures the same phenomenon from the LP side. Annual distribution yield from LP portfolios was near 10% in the first half of 2026, has stayed below 20% since the start of 2023, and compares with a historical average of 25% since 2001.

PitchBook data cited in ORIX's April 2026 paper on NAV and GP financing uses a different denominator and arrives at a harsher figure: distributions of about 6% of AUM for the twelve months to June 2025, against a ten-year average of 14% and a pre-2020 average of 17.2%. At 6% a year, ORIX calculates, clearing the $3.6tn of unrealised value in buyout-backed companies would take more than sixteen years; at 17.2% it would take under six.

Morgan Stanley research, reported by Institutional Investor in July 2025, estimated that capital calls had exceeded distributions by $1.5tn since 2018, that distributions were running 50% below normal, and that the 2021 vintage was about 80% below its normal distribution curve, the weakest in twenty years.

Why it matters for family offices

A mature private markets programme is designed to be self-funding: distributions from older funds pay the calls of newer ones. When distributions fall to 10% to 14% of NAV while calls continue, the programme draws on the rest of the balance sheet. Bain found that 53% of LPs said undrawn commitments were limiting new commitments, up 15 percentage points from the end of 2024, and that about two-thirds of respondents to an ILPA survey preferred to hold out for a better multiple rather than take near-term liquidity.

For a family office the effects are specific. The cash reserve described in liquidity management is drawn down faster than planned. Spending that was budgeted against distributions must come from elsewhere. Rebalancing is blocked, because the private allocation stays high while the liquid portfolio funds everything. And the choice between selling an interest and borrowing against it, discussed in the DPI problem and secondaries, stops being hypothetical.

What changed in 2026

Three things moved. Exits recovered: Bain recorded buyout-backed exit value rising 47% in 2025 to $717bn, with strategic exits up 66% and IPO activity up 36% from a small base. The secondary market absorbed more of the overhang: Jefferies reported first-half 2026 volume of $118bn, up 15% on the first half of 2025, with GP-led transactions up 32% to $62bn, and raised its full-year forecast to around $260bn. And pricing held: LP portfolios traded at around 87% of NAV, with buyout at 91%, which narrows the cost of selling for an LP that needs cash. Family offices accounted for 5% of LP-led volume, and the 2026 secondaries market now offers them a functioning exit at a known discount.

What has not changed is the arithmetic. Jefferies' near 10% yield in the first half of 2026 is still under half the long-run average, and Bain's finding that funds raised in 2022 and 2023 hold most of the industry's $1.3tn of dry powder means calls will continue. Large exits are concentrated: seven deals above $10bn made up 22% of Bain's 2025 exit value, and ORIX notes middle-market exit value has sat at $120bn to $140bn for four years. An office whose programme is weighted to mid-market and venture funds should not assume the headline recovery reaches it soon.

The drought is easing at the top of the market and persisting below it. Planning on a distribution yield in the low teens for another year, rather than a return to the long-run average, is the conservative reading of the 2026 data.