Steven Buibish is Director of US Private Equity at PitchBook

In the US middle market, the smallest buyouts have delivered the highest returns—and counter to the usual trade-off, they didn’t take more downside risk to do so.

PitchBook’s Q1 2026 US PE Middle Market Report, which for the first time integrates SPI by StepStone deal-level data, finds that since 2009, realized or partially realized deals in the lower middle market returned a pooled 39% gross IRR and 3.3x TVPI—ahead of every larger band, including the largest cohort, which returned 28% and 2.7x.

You may assume it’s because these are riskier assets, but that’s not what the data shows. In fact, it shows that this subset of deals in the lower middle market has a nearly identical number of poor outcomes and fewer outright losing deals than the upper middle market.

At a time when middle-market GPs are struggling to raise new funds, this data cuts against the narrative that larger deals offer a better distribution of outcomes and raises important questions for allocators and GPs alike.

See the full breakdown, including what SPI’s deal-level data reveals about entry multiples and leverage, in the Q1 US PE Middle Market Report.

This article originally appeared on PitchBook News