Milbank Partner Sebastian Heim Featured in Law360 Q&A on 2026 Private Equity Outlook~~Milbank LLP Global Corporate/M&A partner and Private Equity co-head Sebastian Heim was featured in a Law360 Q&A exploring how private equity sponsors are approaching AI risk, navigating geopolitical uncertainty and adapting liquidity strategies heading into 2026. In the interview, Sebastian discusses how AI exposure is reshaping both commercial and legal diligence, noting that sponsors are evaluating whether emerging AI solutions could disrupt business models within a typical three- to five-year investment horizon. He also highlights the growing importance of structural tools, such as earnouts, rollovers and downside-protection mechanisms, as funds look to capture and price AI-related risk within deal economics. Sebastian points to sustained activity in defense, healthcare, industrials and infrastructure-adjacent sectors, driven by ongoing geopolitical tensions, supply-chain priorities and national security considerations. He also discusses a potential wave of significant corporate carve-outs in the industrial space over the next 12–18 months. On the liquidity front, Sebastian observes that sponsors are increasingly relying on tools such as minority sales, continuation funds, fund-to-fund transfers and preferred structures as valuation gaps and market uncertainty continue to challenge traditional full exits. While straight sales may regain momentum in the coming year, he expects alternative liquidity solutions to remain an essential part of the sponsor toolkit. “I have heard some signs that straight sales may become more viable next year, so perhaps there will be slightly less reliance on these structures,” Sebastian explains. “But there are enough assets in the market where a traditional sale remains a challenge, and sponsors will continue to use alternatives where they make sense.” To read the full Q&A, please click here. (Law360 subscription may be required.)