TPG expects 2026 to be defined by uncertainty rather than caution, with private equity firms required to remain adaptable amid volatile macro conditions, according to chief executive Jon Winkelried.

Speaking in the firm’s The Year Ahead outlook, Winkelried said: “2025 has been a year where the markets have gotten used to expecting the unexpected,” citing policy shifts, interest-rate volatility, geopolitical imbalance, and what he described as a “tidal wave of AI”. He added: “I think there is substantial uncertainty going into 2026,” but stressed that the appropriate response was preparedness rather than retrenchment.

Winkelried said TPG remains “generally an optimist, particularly as it relates to the US economy and the drivers of growth and innovation,” while emphasising the need for firms to remain “nimble and be ready to adjust” during periods of volatility.

Turning to the alternatives industry, Winkelried said consolidation among limited partners is reshaping capital allocation. He noted that the number of firms able to meet LP demands is shrinking, adding that “breadth of product and capability matters a lot more today”. He identified global reach, multi-asset capability, access to large pools of capital, brand, and human capital as prerequisites for sourcing and delivering opportunities at scale.

He also highlighted diverging business models across alternatives, particularly the convergence between insurance capital and alternative assets, alongside firms pursuing balance-sheet-light strategies. “One model isn’t necessarily right or wrong,” Winkelried said, adding that “the resiliency of these different models will vary” across valuation and interest-rate cycles.

Liquidity is increasingly central to that evolution. Winkelried said private markets are seeing a convergence with public markets as managers are asked to oversee both liquid and illiquid pools of capital. “If you ask me what’s the next convergence in our world, I think the next convergence is somewhere around this collision between liquid markets and alternative markets,” he said.

Winkelried described real estate as one of the most compelling opportunities heading into 2026, following valuation disruption caused by higher rates and the inversion of financing rates and cap rates. He said TPG had been able to invest offensively due to dry powder and limited exposure to challenged office assets. “I think that real estate will be one of the more interesting investing opportunities in 2026,” he said, calling it a “next-generation opportunity”.

On private credit, Winkelried said the asset class has become “a very important part of the infrastructure of the credit markets”, noting that capital has shifted from banks into private lenders. While acknowledging “natural growing pains”, he said the market is structurally more resilient due to longer-duration capital and improved liability matching. “The market is here to stay and it will continue to grow,” he said.

Addressing artificial intelligence, Winkelried said markets are experiencing a familiar pattern of overheating and valuation excess. “Are we in a bubble? I think we are,” he said, adding that a correction is inevitable. However, he stressed that “the underlying technology – the innovation – is real” and described AI as “a generational investing opportunity”.

Looking ahead, Winkelried said TPG’s growth strategy will focus on both organic expansion and acquisitions, as capital from institutions and wealth channels increasingly concentrates with fewer managers. He said large LPs are “looking to do more with fewer GPs”, a trend he expects to continue into 2026.

TPG, he concluded, is positioning to capture that shift by expanding capabilities across its franchise while maintaining what he described as a “unique culture” and long-term investment focus.

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