For private equity investors, 2026 is going to be a good year. Financing conditions are stabilizing, interest rates are decreasing, and valuations are beginning to reset. Further, these firms are moving to growth-at-any-cost strategies, deeper diligence, and more disciplined risk underwriting. Here’s a high-level look at a few things you can expect.
PE firms thrive despite policy and market uncertainty. Driven by shifting tariffs, interest-rate cycles, and election-year fiscal debates, 2025 was certainly a challenge. This year, many firms will re-enter the market and hit the ground running with greater conviction, supported by stronger diligence, scenario modeling, and operational planning. A few tactics include doubling down on operational risk management at the outset; leveraging advanced technologies to improve transparency and accuracy, specifically in terms of finance, tax, and regulatory compliance; and diversifying portfolios across sectors, geographies, and business models.
In 2026, deal volume and value will appreciate. This prediction is based on declining borrowing costs and uncertainty around tariffs declining. Leading the acceleration are mega funds and middle-market managers with larger funds driving growth in deal value. But strategic buyers will also play a defining role in this escalation. According to a survey by BDO, 43 percent of fund managers say most competition for deals will come from strategic acquirers. Here’s why: Their ability to pay higher prices, driven by operational synergies and stronger balance sheets, will intensify pressure on PE funds on the buy side. Consequently, this creates more favorable exit conditions for PE funds looking to sell assets.
PE is betting on AI, big-time. Firms are making sizable investments in industries that are the backbone of AI transformation, including data centers, energy producersand network hardware suppliers. While these categories are capital-intensive and tap into measurable, long-term market demand, PE’s interest in AI expands beyond sector strategy and deal sourcing, as firms are looking at how to leverage AI not only for fund and portfolio company management, but also the investment life cycle (due diligence, fraud detection, standardized reporting), which improves the way decisions are made. Good news for investors, indeed.
Valuations will remain high for top-tier deals. Primarily, this isdriven by firms willing to pay premiums for companies considered resilient and/or strategically essential. Common features these businesses share are predictable cash flows, defensible business models, and a position in sectors with secular growth, such as AI, infrastructure, or technology-driven industries. Why? They’re better equipped to withstand macroeconomic volatility compared with other kinds of investments.
Lessons were learned from the 2021 buying frenzy. This eventful year was comprised of abundant liquidity, low interest rates, and pent-up post-pandemic demand, which led to aggressive dealmaking. Now that macro-conditions have shifted, those 2021 deals are struggling to perform. This year, fund managers are expected to learn from the dynamics of years past and recalibrate their strategies, looking more closely at valuations and focusing on fewer but high-quality deals. This builds greater flexibility for exit planning, whether it’s traditional sponsor-to-sponsor, strategic sales, or IPO pathways. For the private equity investors, 2026 might well supersede the revenue-rich dynamic of 2021.
These are a few of the variables that will affect the private equity market. That said, success will most likely depend less on timing markets and more on being operationally prepared to seize the lucrative, high-quality opportunities when they arise.
For private equity investors, 2026 is going to be a good year. Financing conditions are stabilizing, interest rates are decreasing, and valuations are beginning to reset. Further, these firms are moving to growth-at-any-cost strategies, deeper diligence, and more disciplined risk underwriting. Here’s a high-level look at a few things you can expect.
PE firms thrive despite policy and market uncertainty. Driven by shifting tariffs, interest-rate cycles, and election-year fiscal debates, 2025 was certainly a challenge. This year, many firms will re-enter the market and hit the ground running with greater conviction, supported by stronger diligence, scenario modeling, and operational planning. A few tactics include doubling down on operational risk management at the outset; leveraging advanced technologies to improve transparency and accuracy, specifically in terms of finance, tax, and regulatory compliance; and diversifying portfolios across sectors, geographies, and business models.
In 2026, deal volume and value will appreciate. This prediction is based on declining borrowing costs and uncertainty around tariffs declining. Leading the acceleration are mega funds and middle-market managers with larger funds driving growth in deal value. But strategic buyers will also play a defining role in this escalation. According to a survey by BDO, 43 percent of fund managers say most competition for deals will come from strategic acquirers. Here’s why: Their ability to pay higher prices, driven by operational synergies and stronger balance sheets, will intensify pressure on PE funds on the buy side. Consequently, this creates more favorable exit conditions for PE funds looking to sell assets.
PE is betting on AI, big-time. Firms are making sizable investments in industries that are the backbone of AI transformation, including data centers, energy producersand network hardware suppliers. While these categories are capital-intensive and tap into measurable, long-term market demand, PE’s interest in AI expands beyond sector strategy and deal sourcing, as firms are looking at how to leverage AI not only for fund and portfolio company management, but also the investment life cycle (due diligence, fraud detection, standardized reporting), which improves the way decisions are made. Good news for investors, indeed.
Valuations will remain high for top-tier deals. Primarily, this isdriven by firms willing to pay premiums for companies considered resilient and/or strategically essential. Common features these businesses share are predictable cash flows, defensible business models, and a position in sectors with secular growth, such as AI, infrastructure, or technology-driven industries. Why? They’re better equipped to withstand macroeconomic volatility compared with other kinds of investments.
Lessons were learned from the 2021 buying frenzy. This eventful year was comprised of abundant liquidity, low interest rates, and pent-up post-pandemic demand, which led to aggressive dealmaking. Now that macro-conditions have shifted, those 2021 deals are struggling to perform. This year, fund managers are expected to learn from the dynamics of years past and recalibrate their strategies, looking more closely at valuations and focusing on fewer but high-quality deals. This builds greater flexibility for exit planning, whether it’s traditional sponsor-to-sponsor, strategic sales, or IPO pathways. For the private equity investors, 2026 might well supersede the revenue-rich dynamic of 2021.
These are a few of the variables that will affect the private equity market. That said, success will most likely depend less on timing markets and more on being operationally prepared to seize the lucrative, high-quality opportunities when they arise.
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
Every modern business is paying rent. Not for office space or equipment, but for the digital infrastructure that runs the company. This might include the cost of CRMs, email platforms, project management tools, automation tools, analytical dashboards, and countless other tools designed to solve a specific business need. Individually, these tools seem affordable; collectively, they form a permanent tax on business growth.
For several years now, software-as-a-service (SaaS) has been sold as a form of freedom. Businesses were promised low upfront cost, instant deployment, and minimal complexity. For a long time, SaaS delivered on this promise. It helped companies move faster, scale quickl,y and compete globally regardless of size.
But this is shifting. Now, business leaders are beginning to question whether renting critical systems is still a worthy strategy.
The SaaS Era
The rise of SaaS was a necessary evolution. It lowered the entry barrier for tools that once required large IT teams and a huge capital investment.
However, this convenience turned into dependency. Businesses not only adapted SaaS tools, but they also built operations around them. Third-party platforms now hold business workflows, customer data, analytics, automations, and even institutional knowledge. This means that a business has dozens of subscriptions they don’t fully control, can’t meaningfully customize, and must keep paying for to keep operating.
What Sovereign Ownership Means
Sovereign ownership doesn’t mean abandoning the cloud or rejecting modern technology; it means owning the core logic of your business systems. The sovereign models emphasize self-management, control and long-term resilience.
When a business practices sovereign ownership, it controls:
Where data resides (e.g., virtual private clouds or sovereign clouds)
Access permissions and encryption keys
Workflows and automations
Internal knowledge systems
AI models and training data
The ability to move, adapt, or rebuild without needing vendor permission
Self-sovereign identity has been a great support for this shift. SSI protocols allow businesses, employees, and customers to control their digital identities and credentials without relying on centralized identity providers. This means that identity is not locked inside the SaaS platform, as it is portable, verifiable, and owned by the entity itself.
The Real Cost of SaaS Goes Beyond the Invoice
SaaS costs more than renting the service. Aside from monthly or annual subscriptions that compound into a huge expense over time, vendor lock-in makes switching platforms painful and risky. The pricing models also keep changing. Features may be removed or placed under higher payment tiers. Other issues include broken integrations and limited or messy data exports.
More critically, companies adapt their workflows to match the SaaS tools, rather than the tool serving the business. Therefore, innovation is constrained by what the platform allows and not what the business needs.
The biggest risk is when a SaaS provider is acquired, suffers downtime, or shuts down entirely. When this happens, your business absorbs the impact without control or leverage.
Why 2026 Is the Turning Point
Why now? Because the alternatives have finally matured. Decentralized physical infrastructure (DePIN), the maturity of enterprise-grade, open-source software, and modular cloud architecture have made system ownership accessible without deep technical teams. AI has transformed how businesses build, automate, and maintain internal tools. Modular infrastructure allows companies to own their core while selectively renting specialized services.
At the same time, external pressure is increasing as data privacy regulations tighten. Regulatory frameworks like the U.S. Cloud Act, the GDRP and the EU’s Digital Operational Resilience Act (DORA) demand operational independence that SaaS cannot fully deliver. Gartner predicts that by 2030, 75 percent of enterprises outside of the United States will implement data sovereignty strategies due to regulatory scrutiny and geopolitical tensions.
Major players are already responding. IBM is one example of the shift, as they already announced IBM Sovereign Core, software that helps businesses take back control of their data and systems.
Customers are also more aware. They want to know how their data is stored, processed, and protected. AI models trained on proprietary information raise new questions of ownership and risk. In an uncertain global economy, businesses want cost predictability and not endless variable subscriptions.
The mindset is shifting from speed at any cost to resilience by design.
From Renters to Owners
SaaS helped businesses grow. But growth built on dependency has limits.
2026 represents a strategic window where ownership is finally accessible, affordable, and necessary. The shift toward sovereign systems is not about rebellion against technology that has previously helped businesses. It’s about leverage, resilience, and long-term value.
The future belongs to businesses that stop renting their foundations and start owning their future.
Alan F Burke CPA
Reclaiming the Rent: Why 2026 is the Year Businesses Switch from SaaS to Sovereign Ownership
February 1, 2026 · Blog, What's New in Technology
⏱ 4 min read
Every modern business is paying rent. Not for office space or equipment, but for the digital infrastructure that runs the company. This might include the cost of CRMs, email platforms, project management tools, automation tools, analytical dashboards, and countless other tools designed to solve a specific business need. Individually, these tools seem affordable; collectively, they form a permanent tax on business growth.
For several years now, software-as-a-service (SaaS) has been sold as a form of freedom. Businesses were promised low upfront cost, instant deployment, and minimal complexity. For a long time, SaaS delivered on this promise. It helped companies move faster, scale quickl,y and compete globally regardless of size.
But this is shifting. Now, business leaders are beginning to question whether renting critical systems is still a worthy strategy.
The SaaS Era
The rise of SaaS was a necessary evolution. It lowered the entry barrier for tools that once required large IT teams and a huge capital investment.
However, this convenience turned into dependency. Businesses not only adapted SaaS tools, but they also built operations around them. Third-party platforms now hold business workflows, customer data, analytics, automations, and even institutional knowledge. This means that a business has dozens of subscriptions they don’t fully control, can’t meaningfully customize, and must keep paying for to keep operating.
What Sovereign Ownership Means
Sovereign ownership doesn’t mean abandoning the cloud or rejecting modern technology; it means owning the core logic of your business systems. The sovereign models emphasize self-management, control and long-term resilience.
When a business practices sovereign ownership, it controls:
Where data resides (e.g., virtual private clouds or sovereign clouds)
Access permissions and encryption keys
Workflows and automations
Internal knowledge systems
AI models and training data
The ability to move, adapt, or rebuild without needing vendor permission
Self-sovereign identity has been a great support for this shift. SSI protocols allow businesses, employees, and customers to control their digital identities and credentials without relying on centralized identity providers. This means that identity is not locked inside the SaaS platform, as it is portable, verifiable, and owned by the entity itself.
The Real Cost of SaaS Goes Beyond the Invoice
SaaS costs more than renting the service. Aside from monthly or annual subscriptions that compound into a huge expense over time, vendor lock-in makes switching platforms painful and risky. The pricing models also keep changing. Features may be removed or placed under higher payment tiers. Other issues include broken integrations and limited or messy data exports.
More critically, companies adapt their workflows to match the SaaS tools, rather than the tool serving the business. Therefore, innovation is constrained by what the platform allows and not what the business needs.
The biggest risk is when a SaaS provider is acquired, suffers downtime, or shuts down entirely. When this happens, your business absorbs the impact without control or leverage.
Why 2026 Is the Turning Point
Why now? Because the alternatives have finally matured. Decentralized physical infrastructure (DePIN), the maturity of enterprise-grade, open-source software, and modular cloud architecture have made system ownership accessible without deep technical teams. AI has transformed how businesses build, automate, and maintain internal tools. Modular infrastructure allows companies to own their core while selectively renting specialized services.
At the same time, external pressure is increasing as data privacy regulations tighten. Regulatory frameworks like the U.S. Cloud Act, the GDRP and the EU’s Digital Operational Resilience Act (DORA) demand operational independence that SaaS cannot fully deliver. Gartner predicts that by 2030, 75 percent of enterprises outside of the United States will implement data sovereignty strategies due to regulatory scrutiny and geopolitical tensions.
Major players are already responding. IBM is one example of the shift, as they already announced IBM Sovereign Core, software that helps businesses take back control of their data and systems.
Customers are also more aware. They want to know how their data is stored, processed, and protected. AI models trained on proprietary information raise new questions of ownership and risk. In an uncertain global economy, businesses want cost predictability and not endless variable subscriptions.
The mindset is shifting from speed at any cost to resilience by design.
From Renters to Owners
SaaS helped businesses grow. But growth built on dependency has limits.
2026 represents a strategic window where ownership is finally accessible, affordable, and necessary. The shift toward sovereign systems is not about rebellion against technology that has previously helped businesses. It’s about leverage, resilience, and long-term value.
The future belongs to businesses that stop renting their foundations and start owning their future.
Disclaimer
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
Commerce, Justice, Science; Energy and Water Development; and Interior and Environment Appropriations Act, 2026 (HR 6938) – This Act is one of the remaining budget bills to fund the government through Sept. 30, 2026. It includes funding for several agencies, including the Department of Commerce, the Department of Justice, the U.S. Army Corps of Engineers, the Department of Energy, and the Environmental Protection Agency. The bill was introduced by Rep. Tom Cole (R-OK) on Jan. 6. It passed in the House on Jan. 8, the Senate on Jan. 15, and was signed into law on Jan. 23.
Financial Services and General Government and National Security, Department of State, and Related Programs Appropriations Act, 2026 (HR 7006) – This Act was introduced by Rep. Tom Cole (R-OK) on Jan. 12. Yet another fiscal year 2026 budget bill, it authorizes investments to support economic growth and entrepreneurship, safeguard American security and authorize funding for the Executive and Judicial branches. The bill passed in the House on Jan. 14 and is awaiting passage in the Senate.
Trafficking Survivors Relief Act (HR 4323) – The purpose of this bipartisan bill is to help stop a vicious cycle that makes human trafficking victims vulnerable to further exploitation. The Act enables survivors to file motions to vacate non-violent convictions and purge arrest records for certain criminal offenses committed as a direct result of being trafficked. The current iteration of the bill was introduced by Rep. Russell Fry (R-SC) on July 19, 2025. It cleared the House on Dec. 1, the Senate on Dec. 18, and was signed into law on Jan. 23.
Finish the Arkansas Valley Conduit Act (HR 131) – Introduced by Rep. Lauren Boebert (R-CO) on January 3, 2025, this bill is related to a Colorado water infrastructure pipeline currently under construction, designed to port clean water from the Pueblo Reservoir to 50,000 Coloradans in the local area. The bill would have extended the repayment period for local municipalities and removed interest payments. The bill passed in the House on July 21 and in the Senate on Dec. 16; it was vetoed by the President on Dec. 31, 2025.
Miccosukee Reserved Area Amendments Act (HR 504) – This bill would have authorized the expansion of the Miccosukee Reserved Area to include a portion of Everglades National Park in Florida. In recent years, the area, known as Osceola Camp, has been prone to flooding, and this bill would have authorized safeguard measures to protect structures within the camp. The bill was introduced on Jan. 16, 2025, by Rep. Carlos Gimenez (R-FL). It passed in the House on July 14 and in the Senate on Dec. 11, 2025. The bill was vetoed by the President on Dec. 30 and failed an override vote in the House on Jan. 8.
Whole Milk for Healthy Kids Act of 2025 (S 222) – This Act amends the existing National School Lunch Act to allow schools participating in the federal school lunch program to serve whole milk. It was introduced by Sen. Roger Marshall (R-KS) on Jan. 23, 2025, passed the Senate on Nov. 20, the House on Dec. 15 and was signed into law by the President on Jan. 14.
Alan F Burke CPA
Completing FY2026 Budget Appropriations, Protecting Trafficked Victims, and Vetoing Special Interest Projects
February 1, 2026 · Blog, Congress at Work
⏱ 3 min read
Commerce, Justice, Science; Energy and Water Development; and Interior and Environment Appropriations Act, 2026 (HR 6938) – This Act is one of the remaining budget bills to fund the government through Sept. 30, 2026. It includes funding for several agencies, including the Department of Commerce, the Department of Justice, the U.S. Army Corps of Engineers, the Department of Energy, and the Environmental Protection Agency. The bill was introduced by Rep. Tom Cole (R-OK) on Jan. 6. It passed in the House on Jan. 8, the Senate on Jan. 15, and was signed into law on Jan. 23.
Financial Services and General Government and National Security, Department of State, and Related Programs Appropriations Act, 2026 (HR 7006) – This Act was introduced by Rep. Tom Cole (R-OK) on Jan. 12. Yet another fiscal year 2026 budget bill, it authorizes investments to support economic growth and entrepreneurship, safeguard American security and authorize funding for the Executive and Judicial branches. The bill passed in the House on Jan. 14 and is awaiting passage in the Senate.
Trafficking Survivors Relief Act (HR 4323) – The purpose of this bipartisan bill is to help stop a vicious cycle that makes human trafficking victims vulnerable to further exploitation. The Act enables survivors to file motions to vacate non-violent convictions and purge arrest records for certain criminal offenses committed as a direct result of being trafficked. The current iteration of the bill was introduced by Rep. Russell Fry (R-SC) on July 19, 2025. It cleared the House on Dec. 1, the Senate on Dec. 18, and was signed into law on Jan. 23.
Finish the Arkansas Valley Conduit Act (HR 131) – Introduced by Rep. Lauren Boebert (R-CO) on January 3, 2025, this bill is related to a Colorado water infrastructure pipeline currently under construction, designed to port clean water from the Pueblo Reservoir to 50,000 Coloradans in the local area. The bill would have extended the repayment period for local municipalities and removed interest payments. The bill passed in the House on July 21 and in the Senate on Dec. 16; it was vetoed by the President on Dec. 31, 2025.
Miccosukee Reserved Area Amendments Act (HR 504) – This bill would have authorized the expansion of the Miccosukee Reserved Area to include a portion of Everglades National Park in Florida. In recent years, the area, known as Osceola Camp, has been prone to flooding, and this bill would have authorized safeguard measures to protect structures within the camp. The bill was introduced on Jan. 16, 2025, by Rep. Carlos Gimenez (R-FL). It passed in the House on July 14 and in the Senate on Dec. 11, 2025. The bill was vetoed by the President on Dec. 30 and failed an override vote in the House on Jan. 8.
Whole Milk for Healthy Kids Act of 2025 (S 222) – This Act amends the existing National School Lunch Act to allow schools participating in the federal school lunch program to serve whole milk. It was introduced by Sen. Roger Marshall (R-KS) on Jan. 23, 2025, passed the Senate on Nov. 20, the House on Dec. 15 and was signed into law by the President on Jan. 14.
Disclaimer
These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
For private equity investors, 2026 is going to be a good year. Financing conditions are stabilizing, interest rates are decreasing, and valuations are beginning to reset. Further, these firms are moving to growth-at-any-cost strategies, deeper diligence, and more disciplined risk underwriting. Here’s a high-level look at a few things you can expect.
Every modern business is paying rent. Not for office space or equipment, but for the digital infrastructure that runs the company. This might include the cost of CRMs, email platforms, project management tools, automation tools, analytical dashboards, and countless other tools designed to solve a specific business need. Individually, these tools seem affordable; collectively, they form a permanent tax on business growth.
Commerce, Justice, Science; Energy and Water Development; and Interior and Environment Appropriations Act, 2026 (HR 6938) – This Act is one of the remaining budget bills to fund the government through Sept. 30, 2026. It includes funding for several agencies, including the Department of Commerce, the Department of Justice, the U.S. Army Corps of Engineers, the Department of Energy, and the Environmental Protection Agency. The bill was introduced by Rep. Tom Cole (R-OK) on Jan. 6. It passed in the House on Jan. 8, the Senate on Jan. 15, and was signed into law on Jan. 23.