Corporate Financing Analysis - The Exit Window Now Open For PE Funds - 20 MAR 2017


For private equity funds, the time to sell off portfolio assets is now. After 2016, a year in which exit activity in the global M&A and IPO arenas recorded a decline, falling by 8% and 40% y-o-y respectively, we highlight that buyout funds have a golden opportunity to spin off their portfolio assets in 2017. We point to rising equity capital markets (ecm), a steady increase in valuations and a broader appetite for dealmaking among investors as key drivers behind a potential PE exit charge.

Following A Turbulent Year

2016 was a turbulent year for the global economy and subsequently for both capital markets and investor sentiment more broadly. For the PE asset class, this meant exits via M&A contracting from a level of EUR556,933mn in 2015 to EUR514,774mn a year later - according to research from Zephyr, a Bureau van Dijk product. Meanwhile, an even greater drop off in activity was recorded in the IPO exit market, where PE funds had little success in selling off stakes as equity markets tumbled. The result was that overall equity exits slumped for the second consecutive year to a level of EUR26,288mn, down from EUR44,15mn in 2015 and from a recent high of EUR69,854 during the 2014 full-year period.

Struggling To Find The Exit
Global PE Exit Activity By Deal Type, EURmn
Source: Zephyr, a Bureau van Dijk product

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